Frequently Asked Questions
Have questions about Medicus?
If you’re looking to learn about the basics of the plan, you can find them outlined on the other pages of this site, including a summary of plan details and how it works, eligibility, how to join, governance, and more.
This FAQ page provides a deeper look at some of the more common questions asked by physicians.
You can start with the “Top 5” and then find other questions, grouped by topic below. Just click on a topic of interest to review related questions and answers.
If you have additional questions or are interested in joining the plan, you can sign up here to book a discovery meeting and speak with one of our Medicus Support Team representatives.
Top 5 frequently asked questions
The following are some of the most common questions asked by physicians.
Our long-term vision includes having the ability to offer Medicus to physicians across the country. Due to legislative considerations, that’s not yet possible in every province. However, we continue to work with various stakeholders to enable incorporated physicians in these provinces to participate in the future.
For a list of currently eligible provinces and territories, please check the Eligibility page.
The contributions of 18% of your capped pensionable earnings that are made by your employer (e.g., your professional corporation) earn you a pension benefit of 2% of your capped pensionable earnings for each year that you participate in Medicus.
That amount is cumulative year over year, so the longer you participate in the plan the more your annual pension benefit will be when you retire. There are minimum guarantees in place to make sure that your pension payments continue to your spouse or beneficiary even if you pass away shortly after retirement.
- For a personalized estimate on the pension you can expect to receive by joining the plan, try the Medicus Pension Benefit Estimator.
- For more details, please sign up to book a discovery meeting with the Medicus Support Team.
Medicus does not provide automatic adjustments for inflation but does allow for pensions to be adjusted from time to time depending on the financial health of the plan. The Administrative Board and Plan Sponsor Committee work together under a robust governance structure to ensure the long-term success of the plan and help protect the interests of all members.
In accordance with this governance structure and related pension legislation, the financial health of the plan must be evaluated at least once every three years by the plan’s actuary. The actuary compares the plan assets to the plan liabilities (i.e., the present value of future benefit payments), and in the event of a surplus, the surplus (i.e., where the assets are greater than the liabilities) may be used to increase benefits, such as providing inflation protection.
In a multi-employer pension plan such as Medicus, fees are not generally charged directly to individual members.
The Administrative Board oversees and manages all fees related to the plan, which are paid by the pension fund from the contributions and investment earnings of the fund. This includes the investment management fees and other costs to run the plan, such as pension administration, plan management and actuarial costs.
- See also: Fees section
The return on the investment, or ROI, is sometimes used by investors to measure the return on a particular investment and can be helpful in comparing different investment options.
In Medicus, each physician’s individual ROI will depend on when they joined the plan and how long they live. Generally, physicians who join in their 30s, 40s or 50s and live an average life expectancy will have an ROI of between 5% and 8% per year depending on the level of inflationary pension increases provided by the plan. The higher the inflationary pension increases provided by the plan, the higher the ROI.
Some common questions – by topic
Choose a topic of interest below to review answers to some of the other common questions about the plan.
- Select a step to read
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Benefit security
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Contributions
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Fees
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Governance & Actuarial
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Investments
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Buybacks
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Plan wind-up
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Relocation
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RRSPs & Tax
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Benefit security
Each physician’s pension is backed by the assets held in trust for the purpose of paying the pensions expected to be paid to physicians in retirement.
The plan is designed with many layers of governance to help ensure that physicians are paid their expected retirement pensions. For example: The plan is registered with the Financial Services Regulatory Authority under the Pension Benefits Act (Ontario) and with the Canada Revenue Agency under the Income Tax Act (Canada). As a result, the plan must comply with applicable legislation and is also subject to oversight by the applicable regulators. The plan is administered by an Administrative Board which is a fiduciary body required to act in the best interests of the plan members. There is also an independent actuary who is hired to monitor the health of the plan for the Administrative Board and advise on corrective measures if required.
Yes, the plan will pay you a pension for as long as you live. One of the key benefits of belonging to a pension plan with other members is that it has been designed to pay pensions no matter how long each individual member lives.
Because Medicus will have many members participating in the plan, the longevity of members is pooled to eliminate the risk of any one member outliving their retirement savings.
To help explain how longevity pooling works, we know that physicians who are age 65 today have an average life expectancy of 92 years.* Because no single person knows if they’ll live to be older or younger than age 92, pooling people together mitigates the risk for everyone who participates in the plan.
Keep in mind, there are minimum guarantees in place to make sure that your pension payments continue to your spouse or beneficiary even if you pass away shortly after retirement.
*Source: Based on the 2014 Canadian Pensioners Mortality table for Public Sector, with 75% pension size adjustments using mortality improvement scale MI-2017.If you die before retirement, there is a death benefit payable as a lump sum payment. The death benefit is equal to the commuted value of the benefits accrued in the plan at your date of death.
- For more details, please sign up to book a discovery meeting with the Medicus Support Team.
For members who are single, the normal form of payment is a lifetime pension with a 10-year guarantee. If you pass away within the first 10 years of your retirement, your pension will continue to your named beneficiary, or to your estate if no beneficiary was named, until 10 years after your retirement date. After 10 years, the pension payments will cease.
The 10-year guarantee ensures that all participants can receive pension payments at least equal to what has been contributed to the plan on their behalf.
The normal form of payment for members with a spouse includes a lifetime pension for you, as well as both a 60% survivor pension and a ten-year guarantee for your spouse. This means that if you die within the first ten years of your retirement, your pension will continue to your spouse until ten years after your retirement date and your spouse will thereafter receive a 60% survivor pension until their death.
If both you and your spouse pass away within the first ten years of your retirement, your pension will continue to your named beneficiary, or to your estate if no beneficiary was named, until ten years after your retirement date. After ten years, the pension payments will end.
Medicus does not provide automatic adjustments for inflation but does allow for pensions to be adjusted from time to time depending on the financial health of the plan. The Administrative Board and Plan Sponsor Committee work together under a robust governance structure to ensure the long-term success of the plan and to help protect the interests of all members.
In accordance with this governance structure and related pension legislation, the financial health of the plan must be evaluated at least once every three years by the plan’s actuary. The actuary compares the plan assets to the plan liabilities (i.e., the present value of future benefit payments), and in the event of a surplus, the surplus (i.e., where the assets are greater than the liabilities) may be used to increase benefits, such as providing inflation protection.
The financial health of the plan is monitored by the Administrative Board and Plan Sponsor Committee, with actuarial valuations prepared by the plan’s independent actuary to assess the plan’s funded status. If the plan’s funded status reduces below a certain threshold set by the Plan Sponsor Committee, various factors will be considered, and plan benefits may be reduced, subject to applicable legislation.
Generally speaking, pension plan income should be considered as one part of your overall income in retirement, in addition to other savings and government benefits (e.g., CPP). The more years you contribute to Medicus, the larger your monthly income will be when you retire – and you will receive that amount monthly for the rest of your life.
Some considerations include your personal situation, what age you join the plan to start contributing, what other income streams you may have in retirement, and what your lifestyle needs and expectations are. Speak to a trusted advisor to discuss your overall financial picture.
The return on the investment, or ROI, is sometimes used by investors to measure the return on a particular investment and can be helpful in comparing different investment options.
In Medicus, each physician’s individual ROI will depend on when they joined the plan and how long they live. Generally, physicians who join in their 30s, 40s or 50s and live an average life expectancy will have an ROI of between 5% and 8% per year depending on the level of inflationary pension increases provided by the plan. The higher the inflationary pension increases provided by the plan, the higher the ROI.
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Contributions
Yes. Generally, your professional corporation, as the participating employer, is permitted to deduct its contributions to a registered pension plan for income tax purposes. There is no personal tax deduction for you as the member. For more information, please speak to an accountant or tax advisor.
For every year that you participate in Medicus, your RRSP room will be reduced in the following year by what is called a Pension Adjustment.
The formula for your Pension Adjustment (the amount your RRSP room is reduced), is equal to the amount of your contributions in any given year, minus $600. As a result, you will only receive $600 of RRSP room each year from the year after you join Medicus until you begin receiving a pension.
- See also: RRSPs & Tax section
No. Each participating employer’s contributions are pooled together in a master trust that holds all the contributions for all the pension plan’s members. This is different than a personal account like an RRSP.
The contribution rate is the same for all members – set at 18% of a physician’s T4 earnings. Those contributions are invested together and used to pay pensions to all plan members in retirement.
Having one master trust for all the contributions allows the Administrative Board that oversees the plan’s investments to access a more sophisticated investment regime and ensures economies of scale as the plan grows.
The contributions of 18% of your capped pensionable earnings that are made by your employer (e.g., your professional corporation) earn you a pension benefit of 2% of your capped pensionable earnings for each year that you participate in Medicus.
That amount is cumulative year over year, so the longer you participate in the plan the more your annual pension benefit will be when you retire. There are minimum guarantees in place to make sure that your pension payments continue to your spouse or beneficiary even if you pass away shortly after retirement.
- For a personalized estimate on the pension you can expect to receive by joining the plan, try the Medicus Pension Benefit Estimator.
- For more details, please sign up to book a discovery meeting with the Medicus Support Team.
No. When you begin collecting your pension benefit in a registered pension plan like Medicus you can no longer contribute to the plan.
Income tax legislation provides that a member cannot accrue a benefit (and therefore cannot contribute) to a registered pension plan while receiving a pension from the same plan.
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Fees
In a multi-employer pension plan such as Medicus, fees are not generally charged directly to individual members.
The plan’s investment manager 1832 Asset Management has entered into a contract with the Administrative Board whereby the investment management fees are capped at 0.6% of plan assets, which is also known as 60 basis points. This fee is competitive relative to other offerings physicians may have access to, and to what other large pension plans in Canada pay to investment managers.
In a multi-employer pension plan such as Medicus, fees are not generally charged directly to individual members.
The Administrative Board oversees and manages all fees related to the plan, which are paid by the pension fund from the contributions and investment earnings of the fund. This includes the investment management fees and other costs to run the plan, such as pension administration, plan management and actuarial costs.
In a multi-employer pension plan such as Medicus, fees are not generally charged directly to individual members.
However, there are a few circumstances where administrative costs or penalties are charged to participating employers.
For example, penalties may be charged if contributions are remitted late. The plan may also charge an administrative fee to process the calculation and required forms upon a marriage breakdown. And should a professional corporation terminate participation in the plan, an administrative fee may be payable by the corporation to process the termination. These additional fees protect the plan from incurring disproportionately large administrative costs for any individual participating physician.
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Governance & Actuarial
An actuary is a professional accredited by the Canadian Institute of Actuaries who uses data and statistical analysis to determine the expected financing required for programs when events are uncertain. Some actuaries work for insurance companies to determine the pricing of life, health, auto and home insurance, and others work with pension plans like Medicus.
In the context of a pension plan, an actuary makes assumptions using historical data and statistical analysis on the future economic environment (e.g., inflation, interest rates, and investment returns), the lifespans of plan members, the likely future earnings of employed members, and when members will retire, to determine how much money the plan needs in order to pay every pension expected by the plan members for as long as they live.
The plan’s actuary is an independent third party. TELUS Health (formerly known as Lifeworks) has been contracted by the Administrative Board and they have an actuarial team that works with the Administrative Board to monitor the health of the plan and prepare the required actuarial valuation of the plan for filing with the Ontario pension regulator.
By law, every defined benefit pension plan needs an actuary to perform a health check on the plan at least once every three years. The actuary’s report on the health of the plan, called an actuarial valuation, is filed with the Ontario pension regulator, the Financial Services Regulatory Authority. The Administrative Board will also ask the actuary to prepare other calculations to help determine if and when benefit increases or decreases are necessary, and to provide advice on the effective management of the plan.
An actuarial valuation report is a report required by pension legislation that determines the health of the pension plan at a specific point in time. It is required to be conducted at least every three years and filed with the Ontario pension regulator. The calculations are done and the report is prepared by the plan’s independent actuary.
An actuarial valuation report is a useful tool for the Administrative Board to determine whether the plan has enough assets to pay expected retirement pensions or whether some corrective action needs to be taken if there are not enough assets at the valuation date to pay expected retirement pensions.
In addition to the actuarial valuation report, the plan’s actuary will perform additional calculations in-between the required valuations to report on the health of the pension plan to the Administrative Board.
The Administrative Board and Plan Sponsor Committee work together under a robust governance structure to ensure the long-term success of the plan and help protect the interests of all members.
In accordance with this governance structure and related pension legislation, the financial health of the plan must be evaluated at least once every three years by the plan’s actuary. The actuary compares the plan assets to the plan liabilities (i.e., the present value of future benefit payments).
In the event of a surplus, the surplus may be used to increase benefits, such as providing inflation protection. In the event of a deficit, benefits may be adjusted downward.
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Investments
The Administrative Board sets the investment strategy, selects the investment manager, and closely monitors performance.
The Administrative Board is a fiduciary body that is required by law to invest the assets in the best interests of the plan’s members, closely monitor the performance of the plan’s assets, and decide if a change in asset mix or investment manager is warranted.
The Administrative Board has engaged 1832 Asset Management, a subsidiary of Scotiabank and one of Canada's largest asset managers, with over $150 billion in assets under management. This partnership provides the plan with access to diversified investment opportunities as if the pension fund already has hundreds of millions of dollars. For example, 1832 Asset Management gives Medicus access to portfolio managers both external and internal to Scotiabank who each specialize in a certain asset class that generally can’t be accessed by individual investors or small pension plans.
The plan’s asset mix is set by the Administrative Board with advice from investment professionals, based on the expected investment return required by the plan to pay pensions. The allowable asset classes and ranges approved by the Administrative Board for each asset class are documented in the Statement of Investment Policies and Procedures, known as the SIPP. The SIPP is compliant with the requirements of the Pension Benefits Act (Ontario) and the policies of the Ontario pension regulator, the Financial Services Regulatory Authority.
Frequent assessments of the asset mix are made by the Administrative Board to review how the asset mix is performing and adjustments are made as necessary.
It is expected that over the first years of the pension plan’s life, as the plan’s assets grow when new physicians join the plan, the asset mix will evolve from relatively simple to more complex. The SIPP describes that the plan is working toward an asset mix of 70% growth assets and 30% fixed income.
The plan is assumed to make a 5.8% annual return, net of investment management fees. This is the expected return needed to ensure the plan can pay the pensions in retirement for as long as each physician lives, based on the current economic environment and on current expectations of how long physicians live.
The plan’s assumed investment return is determined by an independent third-party actuary hired by the Administrative Board and is based on the asset mix policy agreed to by the Administrative Board and documented in the Statement of Investment Policies and Procedures, known as the SIPP.
The independent actuary will review and revise this investment return assumption as the plan’s expected investment return changes due to factors such as changes in inflation, interest rate levels, and the economic outlook for each asset class.
Medicus, like other registered pension plans, can invest in various types of investments such as fixed income, Canadian and international equities, derivatives that help manage risk, and alternative investment classes.
The Administrative Board oversees the plan’s asset mix and its allowable investments. Prohibited investments include any that would not be compliant with the Income Tax Act (Canada) or the Pension Benefits Act (Ontario).
In addition, the Administrative Board recognizes the potential impact environmental, social and governance (ESG) factors may have on the plan’s return and risk and has asked the investment manager, 1832 Asset Management, to evaluate and integrate ESG factors in its investment selection and voting processes.
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Buybacks
A pension buyback allows physicians to transfer assets into Medicus to purchase additional pension for past years of service with their participating employer (e.g., their professional corporation) before having joined Medicus.
This means you can increase the pension you’ll receive at retirement by making a one-time transfer of funds to Medicus. In most cases, your one-time transfer comes from your existing registered retirement savings plans.
To complete a pension buyback, you first need to be a member of the plan. Medicus is currently offering a pension buyback opportunity to physicians who joined the plan before May 1, 2024. Medicus will offer another pension buyback opportunity, likely in 2025.
Join Medicus today to make sure you don’t miss out.
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Plan wind-up
If the decision is made to wind-up the plan, the Administrative Board would oversee the termination of the plan in accordance with the Pension Benefits Act (Ontario).
A review of the plan’s health would be conducted at the wind-up date.
- If there are more assets than needed to pay all the pensions that have been earned, any surplus assets would go to increase pensions or would be returned to participating employers, as determined by the Administrative Board.
- If there are not enough assets to cover the pensions that have been earned, pensions would be reduced equitably as determined by the Administrative Board.
The plan cannot go bankrupt. Its assets are held in trust separate from the assets of any of the participating employers for the purpose of paying the pensions expected to be paid to physicians in retirement.
If the plan is wound up and there are not enough assets to cover the pensions that have been earned, pensions would be reduced equitably as determined by the Administrative Board and in accordance with applicable legislation.
The Pension Benefits Guarantee Fund (PBGF) is a fund that protects defined benefit pension plan members of single employer pension plans from reductions in their pensions resulting from the bankruptcy of their employer.
Because multi-employer pension plans have many employers, the bankruptcy of one employer does not generally have a significant impact on the health of the pension plan or the pensions of the remaining members and therefore multi-employer pension plans, like Medicus, are excluded from participation in the PBGF.
The plan doesn’t have insurance coverage. Each physician’s pension is backed by the assets held in trust for the purpose of paying the pensions expected to be paid to members in retirement.
The many layers of governance of the plan are designed to help ensure that the plan pays physicians their expected retirement pensions.
For example:
- The plan is registered with the Financial Services Regulatory Authority under the Pension Benefits Act (Ontario) and with the Canada Revenue Agency under the Income Tax Act (Canada). As a result, the plan must comply with applicable legislation and is also subject to oversight by the applicable regulators.
- The plan is administered by an Administrative Board which is a fiduciary body required to act in the best interests of the plan beneficiaries.
- There is an independent actuary who is hired to monitor the health of the plan for the Administrative Board and advise corrective measures if required.
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Relocation
Medicus is portable. If you move your corporation to another eligible province or territory, you’ll be able to remain in the plan.
If you move your corporation to a province where Medicus is not yet eligible, you will be able to suspend participation until that province becomes eligible, or you can decide to terminate your participation.
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RRSPs & Tax
In the Medicus Pension Plan, your professional corporation’s contributions are deposited in a single trust fund that holds all the contributions for the pension plan’s members. Those contributions are invested together and used to pay pensions to all plan members in retirement. With a larger number of physicians participating together in the plan, no one physician bears the risk of a bad investment year when they can least afford it or faces the possibility of outliving their savings, as a physician does with an RRSP.
Having a single trust fund for all the contributions allows the Administrative Board that oversees the plan’s investments to access a more sophisticated investment regime and ensures economies of scale as the plan grows.
In contrast, in an RRSP, money is invested in an individual account, tailored to the individual’s personal investment risk tolerance and time horizon. That individual’s retirement savings will depend solely on the performance of their portfolio and how long they live.
In general, the pension benefit that you earn in the plan during a year will reduce your RRSP deduction limit in the following year.
If you are drawing salary from your professional corporation that is at or above the capped pensionable earnings under Medicus for that year, then you will earn the maximum pension benefit for that year. In general, that means you will only be able to make up to a $600 contribution to your RRSP the following year. However, it may be possible for you to participate in Medicus and contribute more than $600 to your RRSP in certain circumstances. (For example, if you have earned income from multiple sources and are drawing less salary from your professional corporation than the capped pensionable earnings under Medicus, it is possible that you may still be able to make contributions to your RRSP the following year.)
- Tip: If you have unused RRSP room from prior years, that room will continue to be available for RRSP contributions.