July 13, 2012 (PLANSPONSOR.com) – A new union agreement will force National Basketball Association players to save for retirement.
Players in the league this past season will receive $34 million, or 1% of what the league and players’ union call basketball-related income, to be invested in an annuity, union attorney Ron Klempner said, according to Bloomberg. Details of the plan, such as which annuity will be chosen or how the money will be distributed, need to be worked out, Klempner added.
Under the 10-year collective bargaining agreement between the NBA and the union, beginning next season, players also will surrender 5% to 10% of their salary for retirement. They automatically will be enrolled in the program and would have to opt-out to keep from participating in the plan, Bloomberg reports.
Investment details for that plan aren’t complete, Klempner said. Retired players can access the money before their pensions begin at age 50. Players can take an early pension at 45.