Will MLB Show Little “Respect For People” By Eliminating Non-Uniformed Personnel Pension Plans?

Posted on March 19, 2013 | in Baseball, Employee Knowledge, Quality, Respect For People, Sports | by
Jerry Reinsdorf

Jerry Reinsdorf is one MLB owner opposed to eliminating the pension plans of non-uniformed personnel. (Image from baseballnewssource.com)

The two pillars of Lean are 1) reduction of waste activities and 2) respect for people. Some of the ways organizations respect their constituents are with fairness, sharing of best practices, making processes as simple to operate as possible, minimizing stressors, and making the employee-organization relationship a genuine partnership. Major League Baseball, an $8 billion enterprise, is considering options to abolish the MLB pension plans for non-uniformed MLB personnel. This includes scouts, trainers, and front office staffs. From ESPNNewYork:

Major League Baseball owners, despite boasting $8 billion in annual revenue and climbing, are moving toward eliminating the pension plans of all personnel not wearing big league uniforms, sources told ESPNNewYork.com.

The impact would affect much of the Major League Baseball family: front-office executives, trainers, minor league staff and scouts. Some of those personnel, particularly on the minor league level and in amateur scouting, make less than $40,000 a year and rely on pensions in retirement.

Besides players and field managers, these are the folks who make organizational processes run as smoothly as possible – they find the players and keep them healthy, they manage sponsorships and ticketing operations, and they maintain an enlightening customer experience at the ballpark. These employees are the most cost-effective members of the organizations for whom they work, with lower-than-functional-average salaries and long hours at the park or on the road. They aren’t the employees drawing the multi-million dollar salaries.

It is a known fact that struggling enterprises in downtrodden industries look for ways to cut pensions or benefits in order to remain financially functional. Major League Baseball does not have that problem.

Jerry Reinsdorf, owner of the Chicago White Sox, is heavily opposed to such a plan. More from ESPNNewYork.com:

The first attempt to do so (eliminate the plan), initiated last year by a small-market owner, was voted down after Chicago White Sox owner Jerry Reinsdorf chastised his brethren for being petty with the lives of ordinary people given the riches produced by the sport. A second vote, which had intended to be kept secret, is now scheduled to take place at owners meetings May 8-9 in New York.

A majority of owners now favor the abolition of the pension plan, a source said.

There are a lot of details not readily known about the plan of MLB. For example, would this eliminate the plan all together or would it just prevent future accruals or new policies? It’s expected that the plan in place would remain but future contributions could be halted.

This is a tough decision for Major League Baseball to make. As a former employee in the baseball industry, the hours can be grueling for very little pay but the industry has so much demand for so few positions. MLB from a capitalism standpoint can afford to cut benefits, but from a respect for people view they are being excessively frugal.

The whole pennywise/dollar foolish idea comes to mind. I’ve long since believed that MLB and minor league baseball employees should be treated as knowledgeable partners instead of warm bodies to churn through the system. There are so many workers who come into the industry with enthusiasm and gusto, and get worn down by the system so much that they leave the game they love because of the physical and mental toll.

That’s not respect for people. These pension plans are a tough nugget because of the public nature of the teams, but there’s so much more teams can do for their employees.

Here’s a great line from Craig Calcaterra of NBCSports.com’s Hardball Talk:

Major League Baseball is swimming in money. The people who choose to work in front offices often do so at great financial sacrifice in order to be involved in a business they love. To eliminate pension plans like this is shameful. Shameful and greedy. And Major League Baseball ought to be ashamed of itself if it carries out this plan.

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6 Responses to “Will MLB Show Little “Respect For People” By Eliminating Non-Uniformed Personnel Pension Plans?”

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  2. Hard to say if this violates “respect for people.” It’s pretty rare in the private sector anymore to have a traditional pension. If they are moving to a 401(k) plan, that’s more in line with how things work anymore.

  3. Chad Walters says:

    It all depends on what is being eliminated – and what promises made will end up being broken.

    If pensions promised are not fulfilled, that’s an issue. If future accounts won’t be added to the pension plan, that’s another.

    I don’t know the laws or legality of all this, but if MLB is simply going away from using pension plans and now relying on 401k for future retirement plans for employees then there is less of an issue.

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