Ex-NBA Player Says He Was Denied COLAs in Pension Case

A former NBA player petitioned the US Supreme Court last week to review his retirement benefits case, which alleges the National Basketball Association Players’ Pension Plan denied the retiree cost-of-living adjustments (COLAs) he was entitled to after his pension payments ended.

The lawsuit from Zaid Abdul-Aziz, who played basketball for the NBA from 1968 to 1978, was thrown out of Second Circuit in November after previously failing to make it through the US District Court for the Southern District of New York in March. Among the six teams he played for were the Boston Celtics and the Houston Rockets.

Both courts ruled in favor of the NBA, which argued that Abdul-Aziz failed to file for breach of contract within the six-year statute of limitations. The former athlete filed his lawsuit in June 2017, roughly 16 years after his benefit payments ended in July 2001.

But the plaintiff, who elected for a 10-year fixed benefit, asserted that the countdown clock for limitations should have started in June 2015, after the basketball player said he was first notified through written notice that he had had a right to COLAs.

“The law is that the statute of limitations is not supposed to rule until there is a clear repudiation of an ERISA [Employee Retirement Income Security Act] benefit, so it’s our contention that Mr. Aziz was not put on notice of a right to additional benefits,” said Jason L. Melancon, counsel for Abdul-Aziz.

“Prior to that, no letter addressed COLAs in his retirement benefits at all,” Melancon added.

A spokesperson for the NBA could not be reached for comment. But in legal filings, an associate counsel for the NBA was cited as saying that the basketball player was provided with benefit illustrations that explained his 10-year payments “would equal the entire amount of his pension benefits.” In other words, that’s all he was entitled to receive.

That’s in violation of the Employee Retirement Income Security Act, Melancon said. Under the protection, Abdul-Aziz is entitled to COLA payments for the rest of his life, even if his payments from a fixed 10-year plan have expired, the lawyer said. The same is also true of retirees who elected for a lump-sum payment, he said.

Melancon said the previous court rulings reflected a reluctance from judges to enforce retirement benefits more than a decade after pension payments ended. But the lawyer argued the case has far-reaching consequences beyond former NBA players.

“Their ruling opens up a Pandora’s box, because now statute of limitations is going to be what employers use to deny additional retirement benefits to every single retiree who elects to receive an actuarial benefit,” Melancon said. “So, if you elected to use a lump sum benefit or a 10-year benefit, you’re screwed now.”