Judge frees pension funds for players

March 21, 1992|By Norris P. West | Norris P. West,Staff Writer

A federal judge has ended an eight-year dispute between NFL players and owners by releasing $17.8 million to the players' retirement fund.

Senior Judge Joseph C. Howard signed an order Thursday in U.S. District Court in Baltimore to free up the money. NFL owners made one last attempt to hold up the release yesterday by filing a motion seeking a stay of the order.

The dispute resulted from a 1982 collective bargaining agreement that required NFL owners to contribute $12.5 million annually into a pension fund for retired players that was operated by six trustees -- three appointed by team owners and three by the National Football League Players Association.

In 1984, however, the owners paid only $7.5 million into the plan, saying additional contributions may not be fully tax deductible. They eventually paid the additional $5 million, but used the same argument on tax deductions to withhold the entire $12.5 million payment in 1986 and part of their contribution in 1987.

Owners contended that because the contract with players contained a clause that made their contributions irrevocable, they would not be able to recover overpayments to the fund.

The Internal Revenue Service ruled in 1987 that the contributions were not fully deductible. The three owner-appointed trustees filed an action in U.S. District Court in Baltimore to appeal the IRS' ruling, and the player trustees filed a cross claim for the unpaid balance of $17.8 million.

Howard entered a summary judgment against the owners for the entire amount and, after a trial, ruled that the club's trustees had breached their fiduciary duties by failing to act in the best interest of the plan's beneficiaries.

The NFL teams appealed to the Fourth Circuit U.S. Court of Appeals, which agreed last August that the clubs owed the $17.8 million, although it ruled that no fiduciary duties were breached.

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