NBA pension - What is it and how players benefit from it?

The NBA is the best basketball league in the world. There is no doubt about it. The top players in the world are part of the league and compete for the championship each year.

The NBA has major income coming from TV rights, merchandise, advertising, etc., and most teams are worth billions of dollars. The majority of the players are under lucrative contracts. Hence, it would make sense to have a generous pension as well.

Thanks to an agreement between the NBPA (Players' Association) and the league, the pension program is one of the most generous in the sports industry. But how does it work, and what benefits do retired players have?

Retired NBA players have significant benefits from the pension program

A pension is the amount of money a player receives following his retirement from the league. The minimum limit is three years of action in the NBA. The more years one player spends in the league, the more money he will receive.

Players are not obliged to play a full season to receive a pension. They should be under contract for, at least, one game, whether they play or not. If this happens, it counts as a full season.

The agreement between the NBPA and the league includes a minimum pension for those who have spent, at least, three years in the league. The maximum is for those that have played, at least, 10 years in the league.

A retired player is eligible to start receiving the pension at the age of 45. The maximum age limit is 62 years old. If a player decides to opt in for the NBA pension at 45, they will get much less money than if opting in at 50, 55 or 62.

The maximum amount of money an NBA player with, at least, 10 years of experience can receive is $215K on an annual basis.

If he decides to start getting paid at the age of 45 or 50, he would get $800 per month for each year he played in the league. This means a three-year retired NBA player would get a pension of $2,400 per month.

Of course, an NBA pension includes other benefits, too, such as lifetime healthcare insurance, both for themselves and their families (for 10-year plus veterans).

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One such example is Dallas Mavericks guard Tyler Dorsey. The Greek-American guard spent two years in the NBA, playing for the Atlanta Hawks (2017-19) and Memphis Grizzlies (2019).

He then decided to play overseas and spent three years in Europe, playing for EuroLeague powerhouses Maccabi Tel-Aviv (2019-2021) and Olympiacos (2021-2022).

Despite having very lucrative offers from Olympiacos and fellow EuroLeague powerhouse Fenerbahce this offseason, he decided to return to the US and join the Mavs on a two-way contract.

Aside from the chance of returning to the best league in the world, he also had the opportunity to become eligible for a pension by appearing in just one game this season.

This happened last week when he played in the Mavs' blowout win over the Memphis Grizzlies on Saturday, October 22 (97-136). Dorsey spent four minutes on the floor and scored nine points, on 4/4 shooting.

After the game, he became eligible for a pension as this is his third year in the league. So whether he remains with Dallas or returns to the EuroLeague if the Mavs waive him, his pension is guaranteed.

Overall, thanks to the NBPA's actions and the agreement with the league, retired players can receive a significant amount of money in what is considered the best pension program in the sports industry.

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