You just can't get there from here
Due to regulations that limit the amount of money highly-compensated individuals can contribute to their qualified plans, it is difficult for physicians to replace their income after retirement. And the more money a physician earns, the harder it becomes.
There are tools available to the highly compensated that combat this reverse discrimination, but many physicians are unable to utilize them, or they are not included in their benefit plans. In many cases, the structure of private practices does not allow physicians to take full advantage of the tools available, and physicians who are employed by hospitals simply don’t have access to them.
Building a Bridge
This sets up a huge opportunity for hospitals. By choosing to offer physicians a compensation package that will put them on a path to post-retirement financial wellness, a hospital can differentiate itself in the marketplace, improve physician alignment, and have a positive impact on the lives of its doctors.
I was recently reminded of the real-world impact of these benefits when I met with an OBGYN to discuss his nonqualified deferred compensation plan (NQDP). This physician is nearing retirement. Even after selling his share of the practice and distributing his qualified plan, he would be preparing for a significant change in lifestyle if it weren’t for his NQDP. This hospital-sponsored plan will allow him to make the transition to retirement on time and with dignity. It is hard to measure the appreciation he feels towards his hospital for providing the benefit. This kind of goodwill is sure to reverberate throughout the organization, creating a culture that will attract the next generation of physicians.
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