HOOPP pension plans

[rs269031]

Hello,

Just out of interest, I’m just wondering whether anyone here is familiar with the terms and availability for the HOOPP plan for doctors. Do most doctors in Ontario have this pension plan? I know it is the case for many nurses and hospital staff but I was just wondering if most hospitals contribute for doctors too (and what kind of doctors if they do).

I ran some numbers in the calculator on the website and the pension seems ridiculously high: if your earnings were $300,000 per year (I know not all doctors earn this but many specialists do) and you joined the pension at age 32 until age 60, you would receive approximately $14,435 per month or $173,220 per year. 

If anyone has any info as to how HOOPP works for doctors, I would be interested to learn more! As well, how it compares to the federal public service pension (I always thought it was the best pension available out there, but clearly not if the above info is accurate) and/or other DB pensions.

[Lactic Folly]

A quick look at the website states that the program is available to hospital employees. The majority of doctors are not hospital employees (and must fund their own retirements), although they have *privileges* to work at a hospital - an important distinction. I am not sure whether the small proportion of physicians that might actually be hospital employees would be eligible. 

[la marzocco]

All salaried (e.g., alternative funding model) physicians working at hospitals are under HOOPP. Lab specialties like path easily come to mind. 

[rmorelan]

41 minutes ago, la marzocco said:

All salaried (e.g., alternative funding model) physicians working at hospitals are under HOOPP. Lab specialties like path easily come to mind. 

I could probably dig this up but I was curious what the formula for that pension actually was, if you happened to know. 

[la marzocco]

2 minutes ago, rmorelan said:

I could probably dig this up but I was curious what the formula for that pension actually was, if you happened to know. 

Based on a few conversations I have had in the past.. I heard it was 2% x # of years of service x average of last 3 years of pensionable earnings. Haven't personally fact-checked this information tho.

[rmorelan]

Just now, la marzocco said:

Based on a few conversations I have had in the past.. I heard it was 2% x # of years of service x average of last 3 years of pensionable earnings. Haven't personally fact-checked this information tho.

thanks - that sounds standard so it good enough to start. That would make it a pretty powerful pension for a doctor to say the least, assuming you stand there for 30 years (usually they top out at 60% or so). Removes retirement planning from being a major concern ha

 

[NutritionRunner]

As an allied health team member working in Ontario, I have a HOOPP pension.  It’s a little more complicated than just 2% and it’s not based on the last three years of pensionable salary.

Basically, each year, I pay into my HOOPP two different amounts: HOOPP low and HOOPP high.  I pay the low percentage on up to the year’s maximum pensionable earnings (YMPE) which reflects that I’m also paying into CPP (YMPE is set by the federal government).  That percentage is 6.9% of my annual salary.  HOOPP high is paid on my annual earnings about the YMPE, and is 9.2%.  For every dollar that I contribute to HOOPP, my employer contributes $1.26.

When I retire, HOOPP takes my five highest years of salary during the period that I contributed to the plan and averages them - those are my average earnings (they don’t just take the last five years as some people take lower paying jobs as they wind down towards retirement).  They then do the following calculation: [average earnings up to the YMPE x 1.5% + average earnings above the YPME x 2% ] x years of contributory service = annual HOOPP pension.

The lower percentages on the earnings up to the YMPE reflect that when I contribute, I am also contributing to CPP up to that amount, and when I retire, I’m receiving CPP benefits up to that amount.

[la marzocco]

26 minutes ago, NutritionRunner said:

As an allied health team member working in Ontario, I have a HOOPP pension.  It’s a little more complicated than just 2% and it’s not based on the last three years of pensionable salary.

Basically, each year, I pay into my HOOPP two different amounts: HOOPP low and HOOPP high.  I pay the low percentage on up to the year’s maximum pensionable earnings (YMPE) which reflects that I’m also paying into CPP (YMPE is set by the federal government).  That percentage is 6.9% of my annual salary.  HOOPP high is paid on my annual earnings about the YMPE, and is 9.2%.  For every dollar that I contribute to HOOPP, my employer contributes $1.26.

When I retire, HOOPP takes my five highest years of salary during the period that I contributed to the plan and averages them - those are my average earnings (they don’t just take the last five years as some people take lower paying jobs as they wind down towards retirement).  They then do the following calculation: [average earnings up to the YMPE x 1.5% + average earnings above the YPME x 2% ] x years of contributory service = annual HOOPP pension.

The lower percentages on the earnings up to the YMPE reflect that when I contribute, I am also contributing to CPP up to that amount, and when I retire, I’m receiving CPP benefits up to that amount.

Where do I sign up? Thanks for clarifying @NutritionRunner!  

[NutritionRunner]

6 minutes ago, la marzocco said:

Where do I sign up? Thanks for clarifying @NutritionRunner!  

Hehe. If you’re a family physician, come work at a Community Health Centre in Ontario!  Our physicians are on salary and are able to be part of HOOPP.   

It’s definitely a nice pension, and the current funded status at the end of 2017 was 122%.  The plan seems to be quite well managed, reading the summary of the annual report they sent to all members.  

[rs269031]

 Very interesting, thank you all for the insight.

@NutritionRunner, when you contribute, you pay 16.1% of your annual earnings pre-tax right? 

This plan is absolutely insane if you can get on it early enough!

[NutritionRunner]

30 minutes ago, rs269031 said:

 Very interesting, thank you all for the insight.

@NutritionRunner, when you contribute, you pay 16.1% of your annual earnings pre-tax right? 

This plan is absolutely insane if you can get on it early enough!

Well, it’s not a straight 16.1% of your pre-tax earnings.  It’s 6.9% of your earnings up to the YMPE (for 2018, that’s $55,900), and then 9.2% of your earnings over the YMPE (so your earnings - $55,900).

So for 2018, I’m paying into HOOPP:

6.9% x 55,900 + 9.2% x (my pre-tax earnings - 55,900)

Say you are an allied health team member earning $80,000 per year (using allied health as most physicians aren’t on salary, although as I said our CHC physicians are and can be part of HOOPP).  You will pay into HOOPP:

(0.069 x 55900) + (0.092 x 24100) = $3, 857.10 + $2,217.20 = $6,074.30

Your employer will contribute $7,653.62

[Snowmen]

As some people have said in the past, give me a pension like that with a lack of overhead and I'll gladly accept to be salaried instead of FFS unless the salary is more than like 25% lower than what I could earn by being FFS.

[la marzocco]

1 minute ago, Snowmen said:

As some people have said in the past, give me a pension like that with a lack of overhead and I'll gladly accept to be salaried instead of FFS unless the salary is more than like 25% lower than what I could earn by being FFS.

I speculate that this may have been a compromise pathology and other lab specialties took back in the day

[Snowmen]

2 minutes ago, la marzocco said:

I speculate that this may have been a compromise pathology and other lab specialties took back in the day

With the obvious risk being to end up like pathology which lost a lot of its leverage after becoming salaried.

[NutritionRunner]

You can see the salaries that family physicians at CHCs make here: https://www.aohc.org/jobs

For example, at one CHC, for a 1.0 FTE family physician, the salary is between $220,300 and $256,832. https://www.aohc.org/job-posting/Physician-14

At another CHC, a 0.5 FTE position has a salary of $102,875. https://www.aohc.org/job-posting/Physicians-4

I have no idea if those doctors would earn more with FFS.

 

[Snowmen]

There's one that's 17,5 hours/week for about 115k per year. Say you could combine 3 of those (you probably couldn't combine more than 2 but for comparison's sake), that would give you an income of 345k without overhead (that's about 80k save right there) and a juicy pension/benefits. That's a lot more than a typical FFS FP would make while working roughly the same hours. Wow.

[NutritionRunner]

And yet we have a hard time recruiting physicians, because the CHC patient population can be very challenging to work with.  Lots and lots of complexity, lots of poverty and lots of intergenerational poverty, lots of mental and physical disabilities, lots of new Canadians (all the Syrian refugees that settled in our area are our clients), the vast majority of clients are on Ontario Works or ODSP in terms of income.  You see all of the social determinants of health in action. It seems to take a special personality to be able to work in such an environment.  Most of our locums move on, even when offered full-time employment.  Over the past year we’ve had many physicians express an interest, and come and take a tour, yet we haven’t had success in hiring a new physician, although we did hire a new NP about a year and a half ago.

Also, while you could put together two such jobs, I’m not sure you could put together three - our family physicians spend lots of time “after hours” doing all the things they don’t have time to do during their regular work hours, like filling out forms (ODSP applications and appeals - the parts that require the physician’s input, completing referrals that they didn’t have time to complete during their dedicated admin time, etc.)  Oh, and you can’t charge for the forms - the patients can’t afford it, and you can’t bill OHIP the codes for filling them out as you are on salary. They also take after hours call (I’m not sure how frequently, but it is definitely part of the job, as our patients have access to after hours services).  Our physicians also work a “late clinic” one evening a week (I’m working the evening clinic tonight, which is why I have this morning to post here, so I’ve flexed my hours) which may not work if they are trying to do another part-time shift elsewhere.

Oh, and the CHC I work at is in a city with a medical school, and we have residents and medical students working with us all the time. We are also in a fairly new facility, and have plenty of resources available (i.e. access to many different allied health practitioners, many different programs and groups available for patients, OTN available for access to specialists that have super-long wait lists).

[Snowmen]

Still, 230k without overhead and with benefits/pension is very competitive for 35 hours (and a couple more for the admin work you mention). That about what the average FP makes in Quebec with a pension on top and less hours. If I end up in FM, that's definitely something I'd look into...

[indefatigable]

According to this link, average FPs in Québec earn more ~280K and in Ontario even more ~360K.  Not sure if the data is valid though, since it refers to pay as "salaries" on the graph, even though in the text it makes a distinction.  OTOH, I'm not sure if the income would be disproportionately higher in one practice setup vs another - 230K with pension would correspond to easily 320K+ in gross earnings. 

[la marzocco]

5 minutes ago, marrakech said:

According to this link, average FPs in Québec earn more ~280K and in Ontario even more ~360K.  Not sure if the data is valid though, since it refers to pay as "salaries" on the graph, even though in the text it makes a distinction.  OTOH, I'm not sure if the income would be disproportionately higher in one practice setup vs another - 230K with pension would correspond to easily 320K+ in gross earnings (assuming this is in Ontario).  

Qualitatively, one alleviates oneself from the financial headache of retirement planning, that's a big win imo. As much as one can try to actively manage one's own funds through financial advisory services and what not, it is hard to mimic or achieve the same level of returns of an institutional investor like HOOPP. 

[NutritionRunner]

Last post for now, before I head off to work.  CHC work is definitely rewarding but also very challenging.  If you enjoy working with these types of clients and have an interest in the social determinants of health (and truly understand how they affect clients) I think a CHC job can be a great career.  Given that the positions include benefits and a pension (and a very good pension at that), I think the compensation is fair.  I also know that compensation isn't the be-all and end-all for a lot of our physicians: some of them have purposely chosen to just have one 0.5 FTE position in order to do other things that they consider important.

If you are wondering if CHC work might be for you, I would suggest trying to arrange an elective at a CHC (if a medical student or resident) or doing a locum at one (if a newly graduated family physician).  As I said, the work can be very challenging, but also very rewarding.

[Snowmen]

1 hour ago, marrakech said:

According to this link, average FPs in Québec earn more ~280K and in Ontario even more ~360K.  Not sure if the data is valid though, since it refers to pay as "salaries" on the graph, even though in the text it makes a distinction.  OTOH, I'm not sure if the income would be disproportionately higher in one practice setup vs another - 230K with pension would correspond to easily 320K+ in gross earnings. 

230k without overhead is equivalent to close to 300k with overhead and the pension is worth a lot. Also, you'd be hard pressed to find a GP that works 35-40 hours/week and makes 300k+.

[rmorelan]

2 hours ago, marrakech said:

According to this link, average FPs in Québec earn more ~280K and in Ontario even more ~360K.  Not sure if the data is valid though, since it refers to pay as "salaries" on the graph, even though in the text it makes a distinction.  OTOH, I'm not sure if the income would be disproportionately higher in one practice setup vs another - 230K with pension would correspond to easily 320K+ in gross earnings. 

yeah that text is important - particular with all the income posts lately. FD are not making 360K take home. Assume a 30% practice overhead give or take then we are left with about 250K which is rather close to the common number thrown around - with the condition that of course there are a ton of other factors at play. 

[indefatigable]

33 minutes ago, Snowmen said:

230k without overhead is equivalent to close to 300k with overhead and the pension is worth a lot. Also, you'd be hard pressed to find a GP that works 35-40 hours/week and makes 300k+.

I agree - I was putting a rough estimate out there including pension.  I'm also not convinced these physicians only work 35-40 hrs/week - unpaid paperwork can take quite a while.

19 minutes ago, rmorelan said:

yeah that text is important - particular with all the income posts lately. FD are not making 360K take home. Assume a 30% practice overhead give or take then we are left with about 250K which is rather close to the common number thrown around - with the condition that of course there are a ton of other factors at play. 

Agree - without being a FP it's hard to know the overhead range.  Inter-provincial variability in pay for FPs does jump out, of course.  

2 hours ago, la marzocco said:

Qualitatively, one alleviates oneself from the financial headache of retirement planning, that's a big win imo. As much as one can try to actively manage one's own funds through financial advisory services and what not, it is hard to mimic or achieve the same level of returns of an institutional investor like HOOPP. 

It's a great fund for sure.  Professional autonomy is more limited as it's tied to Ontario only, and one would have to put in many years to truly accrue the benefits - so switching locations or practice style would be disadvantageous.  I also believe the upper age limit is around 70, but I'm not sure.  

[la marzocco]

Incorporated physicians who do not want to participate in Canada Pension Plan contributions can pay dividends instead of salary. But, I am wondering how prevalent the practice of opting out of CPP is? I would imagine the incorporated physician would want to contribute, no?