The limited availability of retirement income solutions is giving physicians in Canada a compelling reason to join a new multi-employer pension plan, said Simone Reitzes, managing director of the Medicus Pension Plan, during a session at the Canadian Investment Review’s 2024 Defined Benefit Investment Forum.
As part of Reitzes’ engagement with potential new plan members across the country, she’s seen workers who never expected the possibility of having a DB plan. “I’ve heard so many times, ‘When I went into medicine, I kind of accepted that a pension would never be something I had access to.’”
Read: Medicus Pension Plan reports 158% funded status at start of 2024
There’s a misunderstanding about the ability of physicians — who are often assumed to be high-net-worth individuals — to save on their own. Indeed, they more often face a burden in running their own businesses, which makes it difficult to manage all that’s required to have an effective retirement plan, she said, noting there’s also a great demand for the profession in Canada, leading many physicians to push past their retirement age.
Officially registered as a multi-employer DB plan in Ontario, the Medicus Pension Plan pools its capital from all the different physician corporations to create scale and efficiency. The plan, which was officially established on Jan. 1, 2022, was opened for broader enrolment in mid-2023. As of Jan. 1, 2024, the plan reported a funded status of 158 per cent on a going-concern basis and a 115 per cent funded status on a solvency basis.
For medical workers who are already saving into a retirement plan, the Medicus plan can serve as a supplement to their retirement income, said Reitzes. In her communications with physicians, she’s often asked if the plan is a registered retirement savings plan or a jointly sponsored pension plan.
Read: New multi-employer pension plan coming for incorporated physicians
Reitzes, who has more than 20 years of experience winding up DB plans by either closing them entirely or facilitating de-risking activities, said this new role offers her the opportunity to go the opposite way. “When the opportunity came up, . . . . to think about what it might be like to open a new DB pension plan, of course, it was an opportunity I couldn’t pass up.”
“In my prior role, we were looking at our own employees, wanting them to be productive, but when we think about physicians and the tremendous burden that they face in looking after our health-care system, our communities, especially through the pandemic, there was a light shone in how difficult it was for physicians at that time.”
Looking ahead, Reitzes is focused on the continued expansion of the Medicus plan, especially for physicians in provinces where the plan isn’t yet available. It’s also looking to launch a second buyback opportunity window for plan members during the summer of 2025.
Read more coverage of the 2024 DB Investment Forum.