The Ontario Medical Association is partnering with Common Wealth to offer its physician members and their spouses access to a retirement plan.
The Advantages Retirement Plan, which will be rolled out later this year, is the result of more than two years of research on physician retirement readiness and input from OMA members. A survey conduced among 1,235 members found just 20 per cent said they feel very confident about their retirement readiness. More than a third said they felt not very confident (22 per cent) or not at all confident (13 per cent). And 30 per cent said they’re not contributing to a retirement savings plan at all.
The research also identified several attributes that create a distinct set of retirement security needs for the medical profession. These include that most physicians are self-employed, incorporated professionals who often draw income from multiple sources; they have unique earning patterns and more student debt compared to most Canadians; their life expectancies are higher than the Canadian average; and they view retirement as a gradual process rather than a one-time event.
“Taken together, these factors mean that physicians require a different approach to retirement planning than other public service professionals,” noted the report. “They require a new retirement model — one that combines the characteristics of a good pension with the flexibility that physicians want and need.”
The Ontario Medical Association also asked its members for the most important features of a retirement plan. They cited a plan that puts its members first, offers low fees; includes access to external financial and asset management expertise; is more flexible than a traditional pension; and includes a guaranteed income at retirement.
The new plan, which will be available through an online platform, will offer low investment management fees, flexible contribution options and a guaranteed lifetime income option. It will be governed by an independent board, which will develop and oversee the investment program.
Following up the research’s finding that 71 per cent of members want education on retirement planning issues, the plan will also include digital tools and education resources provided by Common Wealth.
“A collective retirement plan for physicians needs to combine the critical elements of other workplace-based retirement plans with a design that meets the needs of physicians, and we look forward to engaging further with our members as OMA Insurance launches this group retirement plan,” noted the report.
“To support its members, the OMA set about developing a customized retirement plan that combines the elements of workplace-based retirement plans while meeting the unique needs of physicians,” said Dr. Sohail Gandhi, OMA president, in a statement.
“Because the Advantages retirement plan is operated by OMA Insurance on behalf of the OMA’s members on a non-profit basis, we can maximize the retirement value of our members’ money. Advantages will aim for costs in line with those of a large pension plan, which can be two to three times less than what individuals pay for in the private market.”