Dustin Pedroia had yet another procedure on his knee, this one is a quality of life issue vs a ever playing again issue.
Pedroia would forgo the remainder of his contract if he retired and the Red Sox would no longer be on the hook for it from a luxury tax standpoint. That's very unlikely to happen. More likely is that he and the team will negotiate a buyout of his contract, like the Mets and David Wright did, which won't give the team much if any relief from a luxury tax standpoint but might change how they pay out the deal in real dollars. It would probably also involve giving him a position within the organization.
I would expect the main reason to do this instead of simply riding out the deal is that official retirement starts the clock on Hall of Fame eligibility and probably has implications for the MLBPA pension/retirement plan too. The team also gets the benefit of his spot on the roster being freed up. During the season it's not a big deal since he can be placed on the 60-day DL, but there is no 60-day DL in the off-season, so they'd have to carry him on the 40-man through the winter.
So basically, they have been paying him his full salary under the terms of his contract even though he hasn't stepped foot on a field in two years.
Look; I get it, the average career is short, these guys have to make all the money they can while they can, but guaranteed contracts in baseball are a complete and utter joke, this is example #1.
The Red Sox have been hamstrung the past two years, not the players fault he got hurt, I guarantee you the MLBPA has been hounding him NOT to retire, but it is a farce.
Whoever the union representative was who conned the owners into going along with guaranteed contracts should be worshiped by every former and current player who has profited thanks to him.
In football, you sign a contract, it's front loaded with signing bonuses and 95% of the players never see the money on the back end as they either get cut or renegotiate and they roll some of that money into the new deal.
Again, the players owe that guy in a major way.