Plan Summary

How it works

In a multi-employer pension plan like the Medicus Pension Plan, a group of employers come together to participate in and contribute to the same pension fund. In this case, the substantial majority of participating employers are physicians’  professional corporations.

Eligibility requirements include being a physician, being incorporated* and having a qualifying income or other eligible physician employers.

Advantages for plan members

A multi-employer pension plan, like the Medicus Pension Plan, offers many benefits for incorporated physicians and their family members, including:

• delivering predictable lifetime retirement income,
• pooling investments, longevity and economic risk among all plan participants,
• providing access to investments not typically available to individual investors, and
• providing valuable survivor benefits to spouses and dependants.

In their dual role as employer and plan member, participating incorporated physicians will enjoy an added layer of financial peace of mind knowing they are contributing to a pension plan that will provide a predictable income stream in retirement, which can complement a broader financial portfolio.

How the Medicus Pension Plan is unique

The Plan is notably different from registered retirement savings plans (RRSPs), tax-free savings accounts (TFSAs), registered retirement income funds (RRIFs) and individual pension plans (IPPs):

• The Plan provides physicians with a predictable lifetime retirement income, including options for continuing all or a portion of that lifetime income for a spouse’s lifetime after the physician’s death (surviving spousal benefit).
  
• Each participating physician’s pension is calculated according to a formula related to personal earnings drawn from their corporation each year.
  
• The Plan pools investment and longevity risks across all participating members. This significantly reduces risk for Plan beneficiaries and helps ensure that they don’t need to worry about outliving their retirement assets.
• All contributions are invested in a single trust fund, managed and overseen by an Administrative Board that includes physician-member representatives.
• The Plan assets are invested over a long horizon, not over one individual member’s lifetime. This investment horizon, as well as the expected size of the pension fund, allows for more diverse investment opportunities.
• A large pension fund creates economies of scale and helps lower fees, resulting in more efficient use of each dollar contributed to the Plan.

Similar to other multi-employer pension plans, a Plan surplus (i.e., when Plan assets exceed Plan liabilities) may be used to improve Plan benefits, such as providing cost-of-living increases. In the event of a Plan deficit (i.e., Plan liabilities exceed Plan assets), benefits may be reduced to ensure the long-term sustainability of the Plan.

The Plan is subject to regulation under pension benefits legislation and is registered with the Financial Services Regulatory Authority of Ontario and the Canada Revenue Agency.

Strong governance and reduced risks

An independent Administrative Board has been formed to serve as the legal administrator of the Plan and oversee day-to-day administration. The Administrative Board is accountable for overseeing a prudent funding model with the objective of building up sufficient reserves to withstand Plan risks.

The Administrative Board is part of a robust governance structure that fulfills all regulatory requirements. This appointed fiduciary oversight body is comprised of representatives that include 50% Plan member representation.

A deeply knowledgeable pension plan management team has been established to support the Plan Sponsor Committee and Administrative Board in their respective roles to help provide a robust governance, administration and investment framework.

This governance structure is similar to those of leading Canadian jointly sponsored or multi-employer public sector pension plans.

To achieve successful administration of the Plan, MD and Scotiabank have partnered with LifeWorks, Canada’s largest administrator of employee pensions and benefits, to provide administrative services to the Administrative Board.

LifeWorks is a world leader in this arena, serving more than 1,400 plans covering over 7.5 million participants. For more information,  please visit lifeworks.com

The details

To be eligible to participate in the Plan, physicians must be employed by a medical professional corporation or other eligible entity.*

Incorporated physicians contribute, via their professional corporations, to the Plan trust fund, which is managed by the Plan Administrative Board.

Each corporation contributes 18% of capped pensionable earnings paid to its enrolled physician employees (where pensionable earnings are capped at $175,333.50 in 2023).

Each participating physician’s pension is calculated according to a formula related to pensionable earnings drawn from that physician’s corporation each year.

Each member earns a benefit of 2% of capped pensionable earnings for each year in the Plan. In 2023, the annual maximum benefit accrual is $3,506.67. If this annual maximum benefit amount is earned for 30 years of service in the Plan, it would equal an annual pension of over $100,000 paid for the rest of the physician’s life on retirement.¹

Plan members have options to continue all or a portion of Plan income for a spouse’s lifetime (surviving spousal benefit).

What's next

As the Plan evolves, MD and Scotiabank will be working with their many partner organizations who represent the interests of physicians across the country on the rollout of the Plan.

The Plan is expected to launch for broader enrolment of Canadian physicians later in 2023, after all applicable regulatory approvals have been obtained.

Working together to benefit physicians

We’re excited to support physicians and help add to their retirement-planning options. We look forward to helping physicians retire with increased peace of mind.