The agreement, which the union's members are to vote on next week, also raises retirees' maximum monthly pension to $1,500 a month, from the current maximum of $1,000, the committee member said.
Assumed discount rates, and minimum and maximum pension, are homogeneous to ensure simplicity in the analysis.
"Disabled players with at least three seasons in the league are fully vested in the NFL's retirement plan, but the maximum pension benefit pales to even the minimum rookie salary; so for the solid veterans and bona fide tars, premature retirement means forfeiting many millions of dollars". .
More specifically, the key measures in this kind of reform are: (1) adjusting pensions in line with inflation instead of wage growth, and (2) setting a cap to the maximum retirement benefit an individual may receive (maximum pension) and indexing it to inflation.
However, to retire with maximum pension benefits, individuals are also required to have worked for a certain number of years (often 40 years),4 which implies that some people may retire after 60 (if they entered the labor market later).
The contract, which union members ratified on Tuesday, also improves health benefits and raises the maximum pension for future retirees to $1,000 a month from $750.
Due to the fact that pensions have a maximum limit, a greater number of workers are entitled to the maximum pension.
In a period of economic growth, these measures would imply an increase in the number of retired individuals whose pensions would be limited due to the maximum pension limit.
The difference between the neutral and the extreme scenarios would be perceptible from 2031 onwards because there would be a significant number of retirees at 65 entitled to the maximum pension.
