What RETIREMENT BENEFITS are provided for qualifying doctors upon retirement?
and salary deferral
Understanding your pension plans
QUALIFIED OR PRE-TAX PLAN
Begins at normal retirement age (typically 65 and continues for your life and/or life of your spouse (depending on benefit election).
Calculated by multiplying:
Highest monthly income of 36 consecutive months Pension percentage (based on credited years of service).
SUPPLEMENTAL RETIREMENT PLAN
Full early retirement benefit *
If retiring before 65, provides monthly pension payments until full Plan 1 pension. begins at age 65.
Eligible if retiring between 60-64*
Excess benefit Lump Sum
If income limits are exceeded (based on IRS rules) when calculating Plan 1 pension, an additional lump sum is provided to the employee to compensate for IRS limits on income payable to employee.
8% Payment of Lump Sum
Paid to help compensate for tax liability when receiving lump sum (from above) payment in one tax year.
What savings plans are available to you?
Plan 2 or Permanent
Contributions made by TPMG of 5% of Social Security wage base ($118,500) + 10% of income (exceeding $118,500 up to $265k).
Example: salary of $200k would result in the following contribution
- 05 * 118,500 = 5,925
- 10 * (200,000 – 118,500) = 8,150
- Total TPMG contribution = 14,075
Employee chooses how this account is invested.
There is a 5 year vesting schedule for TPMG contributions. This means that you must be employed for 5 years to receive the entire TPMG contribution.
Contributions vest annually based on the following timeline:
10% in year 1, 30% in year 2, 50% in year 3, 70% in year 4, 100% in year 5
Example: If TPMG makes a contribution of $10,000, your vesting would be as follows:
- Year 1= 1,000
- Year 2= 3,000
- Year 3= 5,000
- Year 4= 7,000
- Year 5= 10,000
Plan 3 OR SALARY
Contribution can be made on a pre-tax or after tax (Roth) basis.
Contribution type should be made based on income expectations now and in the future- recommend speaking with a financial advisor to understand pros and cons of each.
Contribution amounts are elected by employee based on % of income with a max of $18k for 2016.
There is a catch up provision which allows for an additional $6k contribution if 50 years of age or older.
Additional contributions can be made on an after tax basis.
Up to 6% of your income can be voluntarily contributed on an after tax basis, maximum of $14,425 for 2016.
These contributions can be withdrawn at any age.
Earnings on contributed funds are taxed at time of withdrawal.
Both “Component 1 and 2” can be converted to a Roth account.
Discuss tax implications with your financial advisor before making any conversion decision (click here for definition of Roth Conversion).
How to determine the allocation of
your savings accounts?
Implement funds provided by TPMG retirement plan
Utilize brokeragelink option available through Fidelity
Allows for investment in broader suit of funds.
Investing in this manner requires expertise in proper fund selection and rebalancing.
Recommend reviewing with your financial advisor before making this election through your retirement plan.
How do Tax-Deferred Compensation plans work?
Allow Senior physicians to contribute a percentage of their base salary and annual incentive pay on a pretax basis.
To qualify, prior year’s earnings must be at least $150k or more
Can contribute up to 100% of next years’ base salary
Can contribute up to 100% of annual incentive pay earned the following year
No change can be made to the percentage elected once submitted
- Must make new elections each year
Each deferral will be paid as:
- Single lump sum or quarterly over 3, 5, 10, or 15 years
When will deferred income be paid to you and recognized as income:
- No sooner than 5 years from beginning of the elected deferral plan year
All distributions from Deferred Compensation plans are taxed at ordinary income rate and cannot be rolled over to an IRA account
What Additional Benefits are provided by TPMG to you and your spouse upon eligible retirement?
Medical (including vision)
TPMG will reimburse physicians and their spouse or domestic partner for all Medicare part B premiums if they have TPMG-sponsored medical coverage
Life insurance coverage for entire life equal to 60% of prorated base salary if senior physician status at retirement. Click here for elegibility
60 or older + 15 years of service
65 or older + 10 years of service
Disabled (as determined by Cigna) with at least 10 years of service
** Disclosure: This is for informational use only, please check with your employer’s benefits department to confirm all eligible benefits