At a large medical practice, the middle-aged physicians were unhappy with the quality of their group’s retirement savings program. Many physicians worried that the current plan did not meet their retirement savings needs. Our office helped the practice with a creative plan redesign and RFP to see if they could increase their physicians’ pre-tax contributions.
Once the practice learned about the benefits of a Cash Balance plan, they knew they had found a promising solution. After the RFP, the company added a Cash Balance plan and more than doubled tax-deferred contribution amounts for their physicians. Because these plans permit age-weighted contribution levels, contributions for physicians over 50 were increased by over 200%! Several doctors in their 50s are receiving over $200,000 each.
Non-shareholder doctors, nurse practitioners and other mid-level providers were all included in the plan at varying percentages of pay. In order to pass IRS testing, Staff contributions went from 4% of pay to 6% of pay.
Several years later, the physicians are extremely happy with the results. Many of the doctors have seen dramatic improvement in their retirement income projections, and this plan aids in physician retention and physician satisfaction within the practice.