Dancing with NFLPA's Lawyers Groom Law Group

Below is one of two letters I wrote to Jeff Van Note as the Bert Bell/Pete Rozelle NFL Player Retirement Plan Administrator:

Van Note didn’t reply but he is still personally liable as a Plan trustee/fiduciary for these answers. He had the Plan attorney Douglas W. Ell of the Groom Law Group reply. I don’t think Mr. Ell the plan attorney answered my questions. You read the two letters, compare them and let me know what you think about them.

Mr. Ell’s premise is as we might expect: For you retired players own good the Plan will pay you less in benefits so the Retirement Plan can hold (and hoard) the money so the Plan can have a better “credit (actuary) rating” thus providing you with more “security.” ?? Same ole, same ole…

Perhaps it would be better for you to skip down and read the Groom Law Group letter then come back here:

However he did confirm one thing, that if the Management Council and NFLPA agree they can pay out whatever they wish up to 100% of plan assets in benefits.

What he said of real interest is “There is currently no legal impediment to doing so,” (that is paying out in benefits of 100% of the net assets available for benefits) but then he goes off on what congress might do about “some underfunded plans” as a typical NFL expert scare tactic, as if our plan falls into some low class of endangered “underfunded plans” after he previously mentioned in his letter the troubled “steel and airlines” industries.

Mr. Ell’s statement of “currently no legal impediment” means there are no ERISA laws or any other legal restrictions on paying out $50.58 million or $101.16 million or $151.74 million or $200 million or all $1 billion in benefits. The benefit amount to be paid out is the amount decided on by the active players, as manipulated by the retired player’s adversary Gene Upshaw through his gang of agents.

The active players don’t realize they are the beneficiaries of 68% of every Bert bell Pete Rozelle NFL Player Retirement Plan dollar under the current Benefit Credits scale ($200 per yr to $425 per yr.)

One question I ask in my letter to Jeff Van Note:
Q. Is the investment income of the plan in any way related to the total benefits paid to retired players their widows and survivors?

A. In Mr. Ell’s answer he says “Please note that Plan benefits are not directly connected to the Plan’s investment returns.”

I didn’t ask that, I asked “in any way related” not are they “directly connected,” they could be “indirectly connected” and I believe they are. In fact some who attended the Retired Players Convention in Phoenix reported that Doug Allen, Upshaw’s assistant said the benefits were paid out at less than the investment income amount as if it was policy. That is why I ask the question.

Read the rest of the letters and let me know if you think Mr. Ell came close to answering my questions.

Another sample from Mr. Ell’s letter:
Q. Mr. Ell says “The question you refer to, on Page 4, Schedule H is relevant only for terminated plans.”

A. My answer to Mr. Ell’s is that Page 4, Schedule H Part IV Transactions During Plan Year item 4k is not just relevant for terminated plans as Mr. Ell’s suggests. “Terminated plans” are never mentioned in this section and 4k reads “Were all the plan assets either distributed to participants or beneficiaries, transferred to another plan or brought under the control of the PBGC?” He didn’t mention this is from Form 5500 IRS and Labor Department Pension report forms 2004.

My understanding is the governments PBGC takes over and administers plans when a business or industry goes out of business but the retirement plan still operates with the available funds remaining which could be for an indefinite period of time or if the plan goes bust.

None of the questions 4a thru 4j raise any issue or even mentioned anything about “plan termination.” They all 4a thru 4k deal with “Transactions During Plan Year” just as the section of questions is titled.

Mr. Ell says “As you noted, according to the Plan’s most recent actuarial valuation report, as of April 1, 2005.” That is incorrect I “noted” from the Financial Statements and Independent Auditors Report, Years Ended March 31, 2005 and 2004.” I have never even seen any “actuarial valuation report, as of April 1, 2005.” I have never seen his “future benefits payments were $975,553,083” amount before. I have asked the pension office for all the documents pertaining to the Bert Bell Pete Rozelle NFL Player Retirement Plan and I thought they had sent them all to me.

Mr. Ell’s goes on about the Plan’s actuarial liabilities exceeded the market value of assets by about $134 million. As if this “actuarial liabilities” vs. “market value” ratio has some significance to whether or not the retired players their widows and survivors can be paid significantly higher benefits.

Mr. Ell said that $134 million had been reduced by April 1, 2006 to $101 million but he didn’t say the $33 million reduced amount was going to be paid out or is now available to be paid out in benefits. What good is it as an accounting entry if it can’t be paid out in benefits? It is simply another accounting entry to be used against the great unwashed?

Mr. Ells also says “At that date the Plan was 86% funded, which compares favorably to collectively bargained pension plans in other industries that are less well funded, such as the steel and airlines.”

I guess he means to say the “Plan compares favorably to anything that is less well funded.” Obviously he thinks that I, we are so stupid we need to be told such banal pap. He may be charging the Plan by the word.

Mr. Ell’s discussion of actuarial liabilities is more of the same “muddy the waters” campaign to keep the dumb football players from knowing how much the Plan can pay them in benefits.
I get the impression that Mr. Ell shares the observation made in an article posted on profootballtalk.com about dumb NFL players saying one player’s support of his agent who screwed him over was dumb “Even if the NFL player in question thinks that "gross negligence" means a picture of a fat chick in lingerie.” Mr. Ell’s letter seems to put us in the same category, in his mind.
Of course using Major League Baseball as a comparison of a near identical pension Plan is taboo for Mr. Ell’s because it is a professional sport and it is better funded, having greater liabilities, and pays out higher benefits than the NFL Plan and is a valid comparison whereas the financially troubled “steel and airlines” have nothing whatever in common with our industry.

I am providing (free of charge) the Groom Law Group’ Mr. Ell’s with a comparison of the MLB vs. NFL pension plans.

Another Mr. Ell’s issue in paragraph 4 in his letter: Why are my retirement benefits more secure because the NFL Management Council and the NFL Players Association are working in a collusive effort to increase funding (a little bit) rather than bargaining as labor vs. management adversaries to increase funding (a lot).

How is the pension plan’s improved security that Mr. Ell’s refers to measured? Do you measure it in total benefits $50.58 mil vs. MLB’s $80.9 mil or in the miserable average benefits of $14,451 vs. MLB’s $34,890 therefore Mr. Ell’s seems to reason the lower the average benefit the more secure the beneficiaries are? Just how is the “greater security” that Mr. Ell’s wants us to appreciate, measured? It certainly isn’t measured by the amount of benefits paid? Is it in current liabilities, MLB’s $2.3 Billion vs. NFL $1.04 Billion does that make “your (my) and other players’ retirement benefits” more secure? Does keeping benefits low below poverty level, not allowing retired players more income to pay the doctor bills, medicines, rent, and buy groceries make the Plan beneficiaries more secure? Or is the Plan, its rich self, more secure (able to pay fees, like legal fees etc) at the Plan beneficiary’s expense? How does that make the beneficiary’s lives better, more secure? More secure doesn’t seem to mean better for the beneficiaries. If hoarding the plan assets and income is the Plan Administrator’s idea of plan security, we will take less “security” and higher benefits. Mr. Ell’s firm’s fees are $2,122,750 for 2005 and $3,114,538 in 2004. I’d call that security.

I wonder if Upshaw signs the checks to the Groom Law Group? I notice on a 2004 Dept of Labor LM30 report that they entertained Upshaw with a golf outing and Upshaw was only aware of $368,000 of Groom Law Group legal services. Perhaps those services he cited were for Upshaw personally. The date of the LM30 report was 2004 the year the Retirement Plan paid the Groom Law Group $3,114,538.

The Groom Law Group collected $5,605,288 in 2004 and 2005 from the Bert Bell Pete Rozelle NFL Player Retirement Plan and I get the distinct feeling the Mr. Ell and his firm are adversaries of the retired players and their survivors on behalf of Gene Upshaw and his ilk. Mr. Ell seems to scold me a bit for not appreciating the “distinguished persons who have agreed to shoulder such a weighty burden.”

Q. I ask Jeff Van Note about his possible conflicts of interests how much he is paid, fringe benefits, etc?

A. The answer came from Mr. Ell not Van Note (last paragraph) saying “I am not aware of any conflicts such as you suggest.” I didn’t ask if Mr. Ell knew of any conflicts of interest by Van Note, I ask Jeff Van Note if he has any conflicts of interest and that question goes unanswered.

I am not 100% sure, but I believe that Mr. Ell’s firm’s main responsibility is defending against retired players disability claims like Conrad Dobler’s, and Joe Delamalure, and Mike Webster, on and on, but I think I read that the disability defense legal fees are paid out of the Bert Bell Pete Rozelle NFL Player Retirement Plan. If that is true I wonder how that makes our Plan more secure? That also seems a conflict of interest.

If the active players and the owners approve raising average benefits to match MLB’s or better it is Mr. Ell’s legal opinion that there are “no current legal impediments to doing so.” That is the upshot of, and the only significant statement made in Mr. Ell’s letter of legal maneuvering.

All Mr. Ell’s legal banter about actuarial liabilities is effort to provide Upshaw ammunition, support, and cover to try to help him keep your “Net assets available for Benefits: over $1 billion at present” under his dictatorial control. And to hold your increase in benefits to 20% or less while enabling Upshaw, and his crony’s to “manage” your $1 billion of retirement plan funds. It seems to be any NFLPA scheme except pay it out to the retired players, their widows and survivors, which is the stated and intended purpose of the Plan page 28 of the Retirement Plan Description, the purple booklet.

Upshaw and his gang want to keep hoarding your retirement plan money right where he has it trapped now. Mr. Ell’s firm along with Aon Consulting www.the-catbird-seat.net/Aon.htm
are Upshaw’s main allies in screwing the retired players over because as Upshaw trumpets “They don’t even have a vote.” How about if Congress exempts the NFLPA to represent the retired players legally and the retired players have 3500 votes?

Since it cost $50.58 million for each $14,451 benefit increment then another $50.58 million is a double to $28,902 and a third $50.58 million would bring the average benefit to $43,353. That is a pay out of $151.74 million for $43,353 average benefit. That is not even double MLB’s $80.9 million annual payout. The NFL Plan took in $116 million last year and will probably be up to $123.7 million this year with a $69 million employer contribution and another $54.7mil in investment income, and up to close to $150 million by 2008 and there will still be $1 billion dollars languishing in the Plan’s accounts.

The number of participants covered has increased less than 6% since 2002.
MLB’s plan covers only 21% fewer people than ours, not half as many as Upshaw and his gang claims. MLB pays out nearly $7 million a month in benefits to 21% fewer people.

If this 2006 benefit increase increases Plan liabilities to $2.3 billion like MLB’s, so what? SO WHAT? It won’t break our plan any more than $2.3 billion in liabilities broke the MLB plan. Our plan will still be viable and will still meet the minimum funding requirements of ERISA.


After spending a little time on it I consider Mr. Ell’s letter as unresponsive to my letter to Plan Administrator Jeff Van Note and I will wait a couple days to hear from you guys, then I’ll notify the Dept of Labor.

I wrote Jeff Van Note, Plan Administrator a second letter, I have already emailed it to you guys, and I expect Groom Law Group will probably be answering it before long.

A couple definitions: Upshaw’s gang, Upshaw’s crony’s include NFLPA employees a few retired players and especially the 900 NFLPA/Upshaw’s approved sports agents. I’ve asked the SEC to review the agent’s status as illegal unregistered financial advisors. Individual states also have an interest in financial advisors like agents. The NFLPA/Upshaw approved agents will be the ones advising the current active players to do whatever Upshaw wants them to do about funding increases for all the participants in the Bert Bell Pete Rozelle NFL Players retirement Plan and about diverting some of those same funds into other NFLPA/Aon instigated financial and insurance schemes. The NFLPA has proven itself to be inadequate at selecting and approving investment managers and advisors i.e. Aon, Kirk Wright, Sean Jones, and active player agents like Carl Poston who did not read Redskin’s LB La Var Arrington’s contract before advising him to sign it.

After reading the Groom Law Group’s letter of response to my letter I am even more convinced the only way to get any truth out of Upshaw, the other side and their paid for experts is under oath and with subpoenas. The money spent on the July 25th meeting would be better spent filing a suit then subpoena records and taking depositions to get at the truth.

HERE FOLLOWS THE 1ST LETTER I WROTE TO PLAN ADMINISTRATOR JEFF VAN NOTE
All of you should have this letter already but here it is again.

Thursday, June 29, 2006 (COPY FOR William V. Bidwill, Plan Trustee)

Retirement Board
Bert Bell/Pete Rozelle NFL Player Retirement Plan
200 St. Paul Place, Suite 2420
Baltimore, MD 21202-2040

Jeffery A. Van Note, Plan Administrator

Before the Dept of Labor will answer these questions I have to give the Plan Administrator a chance to answer them. That is why I am writing this letter.

How much of the plans “Net assets available for benefits: $814,761,127” can legally be paid out in benefits to retired players? The preceding wording “Net assets available for benefits:” is the wording of the Plan auditors Abrams, Foster, Nole, & Williams, P.A. of Baltimore, MD.

Can 100% of the “Net assets available for benefits,” legally be paid out in benefits to retired players? If not 100% then what percentage of the “Net assets available for benefits:” can legally be paid out in benefits to retired players? (With the approval of the active players.)

Form 5500 Our March 31, 2005 Plan Financial Statement, page 9, paragraph D closes with “The contributions meet the minimum funding requirements of ERISA.”

Form 5500, 2004 is signed by Jeffery A. Van Note and William V. Bidwill as Plan Administrators. I am addressing my questions to Jeffery A. Van Note as the Plan Administrator, Plan Fiduciary, and Plan Trustee and Player’s Member of the Retirement Board.

These questions has been asked of the Dept of Labor, but before they answer them we must ask it of the Plan Administrator: One question is; the Bert Bell/Pete Rozelle NFL Player Retirement Plan financial statement says there are "Net assets available for benefits: $841,761,128 on March 31, 2005" Since then there has been some investment income and an employer contribution of approximately $69 million on March 31, 2006 so now there is at least $910,000,000 "Net assets available for benefits:" The question is how much of these “Net assets available for benefits” can legally be disbursed in benefits to retired players now, this year, next year, per year, ever? Can all $910 million be disbursed? Investment income in 2005 was $54.7 million only $50.58 million was paid out in benefits, that is $4.2 million less than the investment income. Was the $50.58 million payout in any way related to the investment income of the plan?

Is the investment income of the plan in any way related to the total benefits paid to retired players their widows and survivors?

How much can the Bert Bell/Pete Rozelle NFL Player Retirement Plan legally pay out in benefits?

On IRS-Dept of Labor form 5500 page 4, of schedule H, line K the question is asked “Were all the plan assets either distributed to participants or beneficiaries, transferred to another plan or brought under the control of the PBGC? The NO box has an X in it; the YES box is unmarked. PBGC is the Federal government’s insurance program for when pensions go bust.

The fact that the question is asked, indicates that the plan assets could legally be 100% distributed to beneficiaries. Because it is a YES or NO answer it indicates that it is common for retirement plans to distribute “all the plan assets” to beneficiaries. Because it is part of the report on this Plan one might assume that a YES answer would not have been terribly unusual.

The form does not even say, if YES explain. Therefore one can conclude that it would not be out of the ordinary to pay out in benefits all the assets of a plan, our plan, or any similar plan.

I am not asking how much is called for to be paid out under the CBA, I am asking how much can legally be paid out in benefits to retired NFL players this year of the $841,761,127 in “Net assets available for benefits” if the active players vote to pay it out this year? Now? Next year? The year after? Ever? If the active players vote to pay out 100% of the current “Net assets available for benefits” can they legally be paid out?

I am aware the Plan trustees can not increase the Plan benefits and the NFLPA can not unilaterally reduce or freeze benefits and my question has nothing to do with the trustees increasing benefits. It only pertains to any legal restrictions on how much of the ‘Net assets available for benefits” can be paid out after the active players and the NFL Management Council’s approval of paying out 100% of those Plan assets.

Do you have any conflicts of interest in your role as a Player Member of the Retirement Board or Plan Administrator? How much do you and Len Teeuws receive in salary and “fringe” benefits as Plan trustees? Do you have any outside business connections of any kind with other board members or NFLPA personnel in particular Gene Upshaw? Do you have any connections whatever with the Mellon Bank or any of the investment advisors retained by the NFLPA? Do you have any other insurance or investment connection with Rob Williams or AON Consulting other than as actuaries of the Plan?

This letter is registered and written to comply with the regulations of the Department of Labor. I, we over 700 (est.) of us await your answer. Please answer in writing.




Bernard P. Parrish
A Bert Bell/Pete Rozelle NFL Player Retirement Plan Beneficiary
4129 NW 32nd St
Gainesville, FL 32605

Cc: William V. Bidwill, Plan Administrator


HERE IS THE ANSWER TO MY LETTER TO ADMINISTRATOR VAN NOTE:

GROOM LAW GROUP

Douglas W. Ell
(202) 861-6623
dwe@groom.com

BY US Mail

Bernard P. Parrish
4129 NW 32nd Street
Gainesville, FL 32605

Re: Bert Bell/Pete Rozelle NFL Player Retirement Board

Dear Mr. Parrish:

I am Legal Counsel to the Bert Bell/Pete Rozelle NFL Player Retirement Plan (“Plan”). On behalf of Jeff Van Note and William Bidwill, I am responding to your recent letter of June 29, 2006.

The Plan provides that all of its assets can only be used to pay benefits and expenses of the Plan. The Plan also provides that none of its assets can revert to or be used for the benefit of the NFL, or any NFL Club.

Benefits under the Plan can only be increased by joint action of the NFL Management Council and the NFL Players Association. The six voting members of the Retirement Board do not have the ability to increase benefits. Under federal law, the Board members must follow the terms of the Plan.

As you noted, according to the Plan’s most recent actuarial valuation report, as of April 1, 2005, the Plan’s assets were $841,761,127. At he same date, the Plan’s actuarial liabilities exceed the market value of its assets by $975,553,127. In other words, the Plan’s actuarial liabilities exceeded the market value of its assets by about $134 million. At that date the plan was 86% funded, which compares favorably to collectively bargained pension plans in other industries that are much less well funded, such as steel and airlines. To provide greater security for your and other players’ retirement benefits, the NFL Management Council and the NFL Players Association have worked together to increase the funding level of the Plan. For example, I understand that one year later, as of April 1, 2006, the underfunded amount had been reduced to about $101 million.

Please note that Plan benefits are not directly connected to the Plan’s investment returns. This is true in all “defined benefit” pension plans. The level of benefits is determined by the terms of the Plan. As indicated above, benefits can only be increased by joint action of the collective bargaining parties. There is currently no legal impediment to doing so, although Congress is considering legislation that could block some underfunded plans from increasing benefits. Obviously, any benefit increase would immediately add to the plan’s underfunded status.

Please note also that the question you refer to, on page 4 of Schedule H, is relevant only for terminated plans. The PBGC needs to know if a plan has paid out all its assets and no longer exists. This question is always answered in the negative by ongoing plans. Both the NFL Management Council and the NFL Players Association have stated to me that they have no intent to terminate the Plan and that, to the contrary, they intend to preserve and strengthen it.

You should be aware that no member of the Retirement Board is paid or has ever been paid a salary for his service to the Plan. The retired players are truly fortunate that these distinguished persons have agreed to shoulder such a weighty burden without pay. As you may know, three voting members are appointed by NFL Management Council, and three voting members are appointed by the NFL Players Association. I am not aware of any conflicts of interest such as you suggest.

Very truly yours,


Douglas W. Ell
Plan Counsel
CC: Bill Bidwill
Jeff Van Note
Sarah Gaunt