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PGA pensions the richest in sport

The $9.1 million Tiger Woods earned last year on the PGA Tour in his record-setting season could turn into an additional payoff of nearly $13 million when he turns 60 under the PGA Tour's retirement plan.

In a comprehensive study of the PGA Tour's pension plan, Golfweek Magazine also projected Woods's total deferred compensation package from the tour at about $200 million, and as much as $300 million if he were to become fully vested.

That's not counting investments from Woods's earnings outside the PGA Tour, money from worldwide tournaments, appearance fees and the $54 million a year from contract endorsements.

His father and financial overseer said Woods's net worth could eventually exceed $5 billion.

"If things continue and he remains healthy, there's no limit,'' Earl Woods told Golfweek, adding that $5 billion "might be on the short side.''

Woods isn't the only player to benefit from the PGA Tour's performance-based pension plan.

According to tour projections obtained by Golfweek, a 26-year-old player who begins his career in 2001 and plays 17 seasons could stockpile an account of nearly $43 million, just by averaging 75th on the money list. He could reach that amount without ever winning.

For better players, the future gets even brighter.

The deferred compensation plan features three programs. One rewards players for making the cut, another program contributes money based on how much players earn during three separate segments of the season, and a third deals with overall earnings for the year.

Tour officials said they expect to add $27 million to the retirement plan, which has quietly grown to more than $200 million in total assets since its inception in 1983.

"A few years ago, a player could come out and play his entire career, his life, and still struggle financially,'' PGA Tour commissioner Tim Finchem said. "There is no reason why world-class athletes in our sport shouldn't be compensated in the range of world-class athletes in other sports. The retirement plan helps us move in that direction.''

Some financial analysts, however, caution that tour projections are unrealistic. For example, some projections include players making at least 12 cuts a year between the ages of 45 and 49, which few players have done.

Projections also assume a 5 percent annual increase in plan funding by the tour, an 8 percent average annual interest return on a player's account, and the plan is based on benefits that are not paid out until 60, which skew the numbers.

Tiger Woods in on course to get the biggest pension payout in sport. Allsport.

"It's by far the best pension plan in sports, but the assumptions used in the projects are ridiculously overaggressive,'' said Dave Lightner of McCormack Advisors International, a branch of IMG.

Cuts are the lifeblood of the original retirement plan, launched by former commissioner Deane Beman in 1983 and crafted by Victor Ganzi, a former tax attorney and longtime member of the PGA Tour policy board.

Last year, each cut made was worth $3,253 to a player's plan, and the value doubled to $6,506 after 15 cuts. The arrangement favors a young, successful player such as Justin Leonard, who made an average of 23.8 cuts from 1995 to 2000.

"I've seen the projections of what I'll do, and it's impressive,'' said Leonard, who estimated his overall tour retirement package between $60 million and $100 million, counting his segment bonuses and yearly earnings.

The incentive plan, based on earnings over three segments each year, was designed to encourage players to enter more tournaments. Woods likely never will be fully vested because he only plays about 20 tournaments a year. He is projected to become vested at 62.5 percent, which would make his payout about $200 million, the magazine said.

"We know Tiger has big numbers and the tour does a fantastic job with the pension plan,'' said Mark Steinberg, Woods's agent at IMG. "But Tiger will not play events with the pension plan in mind. He will continue to do what he's doing -- that's building a schedule with being the best golfer ever.''

Woods also will be the richest, even after he stops playing.

"His great, great, great grandchildren will be juiced up over this,'' Brandel Chamblee said. "They'll all be lobbying to get rid of the inheritance tax.''

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