When Seth Waugh accepted the job as the PGA of America’s chief executive officer in 2018, he pledged to try to make lives better for nearly 28,000 members of the organization.
Three years later, he has done so in an important and meaningful way.
At the association’s annual meeting last week in Milwaukee, Wisconsin, Waugh introduced a Member Deferred Compensation Plan that will enable all members to build long-term wealth. This is effectively a retirement program, and it is a game-changer for the organization.
This program had proven elusive for the PGA of America almost since the Tournament Players Division split from the association in 1968. The challenge has been to create a plan that complies with the daunting rules and regulations of the Internal Revenue Service.
Waugh and his team concluded that the best model for what they have in mind exists at the PGA Tour. So they retained the same law firm that devised the tour’s plan. They received feedback from the tour. And they developed their own version and engaged the IRS two years ago.
The plan calls for the identification of activities across all three career tracks (teaching and coaching, golf operations and executive management) for which members can earn retirement credit. Those who participate in these activities and meet performance objectives can earn a contribution from the association toward their deferred compensation fund.
Items on this list have little to do with running normal course operations but refer instead to initiatives that align with the association’s mission and help grow the game. Examples would be supporting the PGA Junior League; hosting a Drive, Chip and Putt event; coaching a high school team; or promoting diversity and inclusion initiatives. The PGA of America will earmark a dollar amount to be contributed to the plan out of general revenues each year. Those contributions are expected to be many millions of dollars each year.
By his nature, Seth Waugh is quick to credit the association board, the officers and the executive team for this achievement. But insiders acknowledge it would not have gotten done without Waugh’s determination and relentless focus on the problem and the opportunity.
The assets earned in an individual’s investment account must remain there until retirement. The aim of the plan is that through time the investments will grow and provide supplemental income at the conclusion of each member’s active service.
It took longer than they had hoped and the COVID-19 pandemic certainly has been an issue, but the IRS recently approved the plan.
There remains much heavy lifting to be done. The association needs to select an administrator to manage investment options of the overall plan, as well as find an administrator of individual member accounts. This will take time so it will be 2023 before the full plan is rolled out to the membership.
Nonetheless, it is a historic moment for the PGA of America.
Where this plan may well make a difference is in recruiting and retaining members. Association members will now have what other businesses can offer employees, filling a benefit gap that might cause members to leave the profession or not join it at all.
By his nature, Waugh is quick to credit the association board, the officers and the executive team for this achievement. But insiders acknowledge it would not have gotten done without Waugh’s determination and relentless focus on the problem and the opportunity. It was a huge risk for an organization that is not accustomed to taking risks; if he failed to get it done after taking on the challenge, it might have been how his tenure was remembered.
Tom Henderson has had an interesting perch from which to view this effort. He was head golf professional at Round Hill Country Club in Connecticut for 34 years until he retired in late 2020. He is a former PGA of America Golf Professional of the Year, and he has served on the association’s board.
He was there when Waugh was hired, and he observed that taking this challenge is why Waugh got the job.
“This is something we have been looking at for a long time,” Henderson told Global Golf Post. “And I applaud Seth for getting it done.”
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