Players to Make Millions in Pensions


The PGA Tour just may have one of the finest ' if not THE finest ' pension plans in all of sports today.
In a report compiled by Golfweek Magazine, it has been disclosed that a 26-year-old player who begins his career on the tour in 2001 and averages 75th on the official money list for 17 years could accumulate approximately $43 million in earnings in his account.
Based off tour projections, Golfweek also reported that World No. 1 Tiger Woods could stockpile anywhere between $200 to $300 million by the end of his career in pension savings alone.
Originally designed by former commissioner Deanne Beman in 1983, the plans basis of compensation was the making of cuts. Its intention was the encouraging of players to compete in as many events as possible.
Today, the plan is structured on a three-part basis. The first rewards players for making cuts in tournaments. The second allocates money based on players official earnings during certain times of the season. The third rewards players overall earnings during the entire year.
Last year, a player making a cut in a PGA Tour event was awarded $3,253 towards their plan. After a player had made 15 cuts, that figure doubled to $6,506.
The potential results: an average player on tour could easily wind up retiring with tens of millions of dollars in their pension plans, possibly without ever having won an official event.
Certain analysts are cautioning, however, that the figures may be inflated, based off the fact that tour projections assume an 8 percent annual interest rate of return, and a 5 percent annual increase in plan funding. In addition, the plan accounts for players making 12 cuts per year between the ages of 45 through 49, and it is based off benefits that are not paid out until a player reaches the age of 60.
Yet, while there is no certainty as to exactly what market conditions will dictate, or how much any given account will ultimately be worth, it is clear that for the good player, the plan will be a source of great financial gain.
So much so, that Woods father and financial overseer (Earl Woods) told Golfweek that he feels his son could potentially assume a net worth of $5 billion or more by the time his career is through.
If things continue and he remains healthy, Woods told Golfweek, theres no limit.
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