Dr. Nicholas Voudouris, who works of a medical centre in Thornhill, Ont. says that a new pension plan for doctors likely won’t benefit him but will help younger medical professionals.Fred Lum/The Globe and Mail
The Healthcare of Ontario Pension Plan will allow self-employed doctors to join starting in January, giving incorporated physicians and their staff a new option to earn defined-benefit retirement income from one of the province’s largest pension funds.
HOOPP’s new eligibility rules will give tens of thousands of physicians a choice to join the plan, after years of advocacy from groups that represent doctors. Until now, individual doctors who incorporated their own practices weren’t able to join HOOPP because they are effectively the employer as well as an employee of the practice, which blurred a key distinction in the way contributions are made.
Many of Ontario’s doctors have no formal pension plan and are saving and planning for retirement on their own, even though some financial-services companies offer suites of products tailored to physicians, such as Bank of Nova Scotia, which acquired MD Financial Management in 2018, and pension service provider Blue Pier.
Physician Nick Voudouris has spent his 34 years in practice maximizing contributions to his registered retirement savings plan and tax-free savings account, and also benefited from some real estate transactions, to build a retirement nest egg. “I went on the assumption that no one was going to help me and I had to do it myself,” he said.
Dr. Voudouris is one of 10 doctors who are partners at Thornhill Medical Centre in north Toronto who are collectively considering joining HOOPP, though they are still waiting for more details, he said. Joining the plan likely won’t make sense for Dr. Voudouris, who is 64, even though he said he has no plans to retire any time soon. “For the older physicians, like me, we missed the boat on this,” he said. “Would I have loved to have had a defined-benefit pension plan? Oh my gosh, would I love that, sure.”
But for doctors who are earlier in their careers – the youngest at the Thornhill clinic is 30 – “this is the wave of the future,” Dr. Voudouris said. “For the younger people … this could really transform people’s view of being in family practice, could mean more people wanting to stay in family practice because they have a nice benefit plan,” he said. “I think it’s a great thing.”
HOOPP started out providing pensions to Ontario’s hospitals, and has since added hundreds of smaller health care employers as medicine is increasingly delivered through community practices and clinics. The pension plan now manages nearly $113-billion for more than 670 employers and 460,000 members, including nurses, medical technicians, food-services and housekeeping staff, as well as doctors who are salaried employees at a HOOPP employer. Until now, however, doctors with their own practices weren’t eligible.
HOOPP’s work to bring doctors into the fold started in earnest last year with research that included speaking to doctors and their financial advisers about how to fairly structure eligibility for physicians. The pension plan will soon allow medical professional corporations, or MPCs – a common way for doctors to incorporate their medical practices – to come on board as employers.
“What we are trying to do is have more health care workplaces join our plan in Ontario and grow our plan in that way, and this was a community that we thought we could solve for and add a pension option for that group of people,” Rachel Arbour, HOOPP’s head of plan benefits, design and policy, said in an interview. The plan needed to figure out how self-employed physicians could enroll on terms that are “consistent with the way the rest of our members join,” she added.
Incorporated doctors who choose to join, including those who run their own practices, work in clinics or provide services from a hospital, will have to make both the employer and employee contributions to the plan. Anyone employed by the MPC, such as nurses or administrative staff, will also be given a chance to join.
Because HOOPP members earn pensions based on their highest five-year period of income, the pension plan needed to make sure self-employed doctors couldn’t secure larger pensions by raising their income for five years and taking a lower salary in other years. To be fair to all members, HOOPP’s solution is to establish a physician’s baseline employment income when they join, then limit how much it can rise or fall in later years for the purpose of calculating benefits, though a doctor’s actual income can exceed the limit.
The Ontario Medical Association has been advocating with HOOPP to allow incorporated physicians to join “for a number of years,” OMA chief executive officer Kimberly Moran said in an interview. The association represents more than 43,000 physicians, medical students and retired doctors, including 26,000 incorporated doctors who will soon be eligible to join.
“We’re expecting a lot of interest in this,” Ms. Moran said. “I think doctors are going to appreciate that they have another way to have more certainty for their retirement.”
The promise of a stable pension could help smaller practices attract and retain high-quality employees such as nurses and support staff, Dr. Voudouris said. And for doctors, “you can concentrate on doing your job and you don’t have to worry.”