MLB's Ten Year Service Time Explained

Major League Baseball has gone through some big changes over the past few years. In 2022, we saw the Designated Hitter rule become the norm for the National League for the first time in the history of that circuit. The year of 2023 also ushered in some groundbreaking rule modifications as defensive shifting became regulated and the pitch clock was introduced.

Even with the recent changes, there have been some things that have remained consistent with Major League Baseball. And one of those things is the league’s deliberate effort to financially and medically support their employees long after they’ve retired. Because of that, this article is going to examine how the ten-year MLB pension program works.

An Overview of Service Time & Its Benefits

The potential for earning benefits begins when an MLB athlete’s “Player’s Clock” starts. The clock starts ticking from the first day they are on an active MLB roster.

And it does not take long for an MLB player to begin receiving lifetime benefits. Once a player has spent 43 days of a season on an active roster, they will be eligible to receive pension benefits up to $9,000 annually for the rest of their life.

If MLB players were looking for an even earlier benefit, they would be delighted to find that they earn full comprehensive medical benefits by spending just one day of a season (!) on an active MLB roster. It’s an incredible program that doesn’t just take care of the multi-million dollar former superstars, but also the guys that worked their way through the minors to have a quick cup of coffee in The Show.

From here, player’s don’t simply have to wait till the ten season mark of service to sweeten their compensation from Major League Baseball and its teams.

Once a player has earned three full seasons of Major League service time, that player is eligible for salary arbitration at the end of the season in which they met or eclipsed the three season service mark. However, there is a caveat for some higher performing players. 

At the beginning of each offfseason, the MLB compiles a list of all players in the league that ended the previous campaign with between two and three seasons of service (and at least 86 days of Major League service in that previous season). From that list of players, they whittle the list down even further to only include just the best 22 percent from the original list. Those in the top 22 percent are referred to as "Super Two" players and they can negotiate their salaries for the upcoming season even though they are technically below three seasons of service time.

Another milestone comes after six seasons of service. At that time, an MLB player has the right to hit free agency. This allows them to field offers from any club in baseball without restrictions. Teams will typically work to extend their best players before allowing them to hit the high-paying open market of free agency.

What Happens at the 10 Year Mark of MLB Service?

For MLB players to qualify for the fully vested portion of the pension program, they must complete 10 seasons of service - with a minimum of 173 days annually on an active roster or the injured list (IL). Unfortunately, some prominent players have fallen short of the 10-year mark due to injury or diminished performance. Nonetheless, those that have successfully spent a decade of seasons on an active roster deserve their kudos.

As we dug deeper into the program, it became evident that the MLB goes above and beyond to take care of all of their employees, not just the players. Any player, coach, manager, or trainer that has worked within the league for at least 10 years will receive a pension payout for the rest of their life. Everyone is allowed to start withdrawing $68,000 annually by the age of 45. However, if you wait until you turn 62, the annual payout bumps up to $220,000. When you think about a trainer or coach that hasn’t made millions of dollars throughout their careers, the impact of this payout becomes even more impressive.

The MLB pension program is the most well-funded in professional sports, with an estimated amount north of $2 billion.

What About 10-and-5 Rights?

You may have been wondering why Salvador Perez was shown in the cover image of this blog...

 At the start of the 2024 season, Salvy had amassed close to 12 seasons of service time. Therefore, his MLB pension is fully vested.

And along the path of his successful career he has been able to pick up sponsorships, like being under contract with the glove company, Rawlings. We even carry a specific SP13 patterned Rawlings mitt that is built with his specifications. But we digress.

Throughout the course of the 2023 campaign and the following off-season, there were rumors of the possibility that Perez may be traded. But arranging a trade for Salvy would have been harder than finding an interested trade partner with available players that interested his Kansas City ballclub. 

The reason things would have been difficult is because Salvador Perez had not only accrued 10 seasons of service time in Major League Baseball. The past 5 years of service time had all been spent with one team (in fact, his entire career has been spent with the KC squad).

The MLB site states the following:

“Players with at least 10 years of Major League service who have spent the past five consecutive seasons with the same team earn "10-and-5" rights. Under these circumstances, a player can veto any trade scenario that is proposed. In essence, 10-and-5 rights function as a full no-trade clause.”

Any effort that KC made to trade for Perez, ultimately could have been done in vain. Perez had the final say on any trade involving him and if he wasn’t interested in leaving Kansas City, he could simply say “no” and the trade wouldn’t materialize. Ultimately, he was not traded.

MLB Player Service Timeline Simplified

• 1 Day: Eligible for full comprehensive medical benefits (i.e. The Player's Clock starts…)
• 43 Days: Players can receive $9,000 annually from the pension
• 3 Seasons: Salary Arbitration (Players that earn “Super Two” designation can also negotiate salary)
  
• 6 Seasons: Players can become free agents
• 10 Seasons: Pension Program becomes fully vested (If an individual player meets the ten season mark and has spent the last 5 seasons with the same team, they earn 10-and-5 rights as well)