For many years the PGA of America has searched for a way to develop some kind of retirement plan for members. As we all know, there are tax rules that prevent the Association from directly giving money to members. But the basic principle is that we can reasonably compensate a member for performing services that advance our exempt purpose; specifically for growing the game of golf. Therefore, the PGA of America created a plan whereby members that participate in programs that meet specified performance objectives can earn a contribution towards a deferred compensation fund.
The aim is that over the years these investments will grow and provide a supplemental income for the member upon reaching the age of 65. Because of the power of compounding over time, clearly younger members will benefit most from the program, but everyone can participate.
In addition to all our programs and other benefits this is now a very real and accessible vehicle to accumulate wealth towards a more comfortable retirement. We further hope that this can serve as a truly significant lure and recruiting tool to attract new talent to our great and growing industry.
Learn more below and click here to enroll.
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Benefits include:
- Tax-deferred growth
- Ability to choose your investment allocation from a wide variety of funds
- Supplement your future retirement income
- Contributions come directly from the PGA
Points System: Members earn points towards the Plan after the completion of certain specified performance objectives/activities.
You must earn a minimum of 200 points in a given program year to be eligible to receive a contribution
- If a member does not reach that threshold, such points will be forfeited
- Additionally, points cannot be rolled over to future program years
- Reporting Points
- Members can submit and keep track of their points online or through the Deferred Compensation App
- Multi-pronged reporting model includes self-attestation, the attestation of another PGA Member, and to the extent available, the use of other readily available data sources.
- A list of eligible activities and their assigned point value can be found below. Note: Partial credit for some activities is available as well depending on the level of involvement
To view the Deferred Compensation program’s points descriptions, click here. Review the Deferred Compensation program’s eligible activities by career path by clicking here.
Who is eligible?
All PGA Members in good standing that are working in the United States. Class F Members will not be eligible to earn points while in Class F status.
A Member that is Class F but returns to good standing in a given year may earn points solely during that time he/she is in good standing. If a Member earns points and an award in a given year but then goes Class F in a later year, that person is still entitled to the amounts previously provided.
The program is not currently offered to those Members working outside the U.S., including those members working in U.S. territories such as Puerto Rico, Guam and the Virgin Islands.
When can I start earning points?
April 1, 2023
If someone signs up for Deferred Compensation prior to April 1 or “mid-season” will points be awarded for those activities completed prior?
Members must record their points and have them attested to within 60 days of completing an activity. Based on this, the member can sign-up after they complete an activity but in order to earn points it must be within that 60 day window which would also include them registering the points.
Are PGA Section employees that are PGA Members eligible?
Yes, provided they meet all other eligibility criteria.
Are National – PGA of America employees that are PGA Members eligible?
No.
I’m already close to retirement or retired, how does this benefit me?
Although we very much wish we were able to have this program in place earlier in your career, we are very excited for the long-term benefit to the profession and game that we have been able to put the program in place now. With that being said, even if it may not benefit you as much as if it was put in place earlier in your career, it does have the opportunity to benefit all members no matter what life stage they are in.
HOW THE POINTS WORK:
What was the process to come up with this points system?
The initial development of the points system was worked on internally with outside counsel and reviewed by the Officers and the Board at the time. It was then submitted to the IRS for review. Based on review, there were a number of changes that were required. The revised points document was shared with a working group that included a cross-section of the Association including those who worked in coaching, operations and executive management, as well as representation by Section Executive Directors. This working group provided further feedback which we reviewed with outside counsel and made adjustments to the extent allowable by the IRS.
Why are so many more activities related to coaching than operations or management?
We do recognize that it does seem that there are more opportunities for those members that are coaches to earn points. Based on the regulations of the program, generally speaking, more coaching activities were eligible for points. With that being said, we worked diligently with outside counsel to ensure that there were enough activities in golf operations and executive management that allowed for those members working in those job functions to very much benefit from the program.
Why isn’t volunteering on a national, section or chapter Board eligible for points?
After consultation with the IRS and outside counsel it was determined that such activities were not aligned with the proposed plan.
I do not understand the percentages. Can you explain this?
To take into consideration that in some instances there are multiple members involved in a given activity, this permits a person for
some activities to earn points even though they may not be the only person involved or the leader of such activity. Some activities allow for partial points and others do not. Please read the definitions to determine the category you may qualify for.
Can I qualify multiple times for the same type of activity?
Yes, with some notations. Although it can be the same type of activity it cannot be the exact same thing submitted multiple times. For example, one may lead multiple PGA HOPE programs throughout the year. In this instance, each program would count as a separate activity. Some of the activities have a cap on the number of total points one may receive in the category and some activities due to their nature only allow for one-time participation (e.g., one year of participation on PGA.com).
How do you verify that someone has participated in an activity?
For each activity, the applying member will need to attest to having participated in that activity. Furthermore, the participating member will need to have another member to attest to that individual’s participation in such activity. Upon request, a member may need to provide additional proof of a completed activity
How will you ensure that members are reporting their activities accurately?
PGA Members are deeply committed to a code of conduct and ethics in keeping with the tradition of the game. Therefore, we will rely on a multi-pronged model which includes self-attestation, the attestation of another member, and to the extent available the use of other readily available data sources. In an instance where it is believed that someone has purposefully submitted for points that he/she is not believed to have earned, such cases will be brought to the Board of Control consistent with other cases related to code of conduct and ethics violations.
Do I need to earn a minimum amount of points?
Yes. In order to be eligible to receive any funds for a given program year, an eligible member must earn no less than 200 points in a given program year. If one does not receive that threshold, such points will be forfeited and will not be eligible for roll over to the next program year.
If I earn more points than the max amount, can these points be rolled over to next year?
Unfortunately, they cannot.
How do the points translate to earning dollars?
The maximum amount an eligible member may receive in program year 2023 is up to $1,500 with a plan in place to increase at a rate of 3% per year. The actual amount received will depend on the number of points earned, total participation and overall contribution by the PGA that year as set at the beginning of each program year. At the end of each program year, a calculation will be done that takes the total fund contribution by the PGA and divides it by the number of points earned minus those points that were forfeited (due to less than the minimum threshold being achieved or someone earning the equivalent of over the max threshold of $1,500).
Could you provide an example of points translating to dollars?
For example, and this is just a hypothetical with simple math, if a member earned 500 points and each point was worth $2 they would have $1,000 contributed to their account.
In order to be eligible to earn anything you need to accumulate at least 200 points each plan year and the max payout for this initial plan year is $1,500.
This dollar amount per point will likely change year over year based on the total number of points earned, the amount budgeted for the Plan by the PGA, and overall member participation
Why was volunteering on National, Section and Chapter Boards not included for receiving points?
After consultation with the IRS and outside council it was determined that such activities were not aligned with the proposed plan. The IRS did, however, approve that Board members be eligible participants for activity outside of such board service.
Will there be changes to the points system in the coming years?
As this is a new program, we will work on an on-going basis to optimize the program to best support the mission. Annually we will evaluate the current point structure (types of activities, number of points and qualifications for points) and determine whether changes should be made to the extent allowable.
All inquiries can be directed to deferredcompensation@pgahq.com or submitted to a form by clicking here.