Make Up for Your Lost Salary

Physician's Money DigestApril 2007
Volume 14
Issue 4

To: All Physicians

Re: Fee Payment for Pension Plan

The pension committee met recently and discussed a change in the way we pay our fees for our pension plan. Currently, the fees that we pay for pension plan management are deducted from our retirement money. Thus, less money is accruing taxfree, and this means our final retirement sum is reduced.

An alternative is to have these fees deducted directly from our salaries in pre-tax dollars, aside from any money that goes into the pension plan. This gives us the tax benefit, and in addition, we can maximize our pension contributions. In order to do this, we need to have a private account with our pension management.

A private account is easy to set up. All that is required is that each of us customizes our portfolio with our pension manager. This customization consists of a minor deviation from their basic plan. If you want to pursue this option, please contact the pension representative below to set up a private account.

Pension representative: Mr. Management

Tel: xxx-xxx-xxxx

Sincerely, Doctor Committee Representative

The newspaper headlines are screaming, "Physicians Lose, Others Win," in the struggle for holding onto health care dollars. One physician group got mad, not sad, about the decrease in their revenue returns and lowered earnings, and decided to do something about it. The easiest way, they figured, was to keep more of the money they did make. As it turned out, that wasn't as hard as it might sound.

This physician group met and decided to look carefully at their corporate pension plan. They were surprised to learn that they were paying their management fee out of their tax-free pension dollars. Though this was easier for the outside managers because they didn't have to bill the physicians separately, the result was less money in the doctor's pocket when they took out their pension money. In other words, the external pension managers that the physicians hired were benefiting by this arrangement, but not the doctors.

The pension committee at this particular medical group met with the outside pension managers to seek a solution to this problem. The result was a change in the way the pension fees were paid by the doctors, now favorable to the physicians. The following letter reflects this modification. Your group could write something similar to correct paying your pension management fees out of your retirement funds.

The diminished share of health care dollars going to doctors is demoralizing and unsettling. But doctors are smart and can see other ways to make money when educated appropriately. A good alternative to accepting diminished earnings is to make up the loss in another way. Proactively seeing that more pension money accumulates tax-free is one such option. And, it needn't be difficult as the example letter indicates.

Shirley M. Mueller, MD, is founder and president of MyMoneyMD, LLC. She educates, both one on one and publicly, on how to effectively self-invest using a simple and effective three-step approach. She has given many lectures about this subject, most recently at Indiana/Purdue University. For more information, visit

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