Everyone is suddenly talking about doctor pensions
When many doctors finally hang up that white coat, many are on their own when it comes to retirement benefits.
“No government has ever given us, or wanted to give us, or willing to give us, a pension plan,” says Dr. Vu Kiet Tran, a Toronto-based emergency, family medicine and long-term care physician who is also the co-founder and president of the Canadian Physicians’ Pension Plan (CPPP). “Most people who work in healthcare are covered under a pension plan, except physicians.”
The landscape is changing, giving doctors new choices beyond the usual registered retirement savings plan (RRSP) or tax-free savings account (TFSA) to save for the future.
“Pension plans are a hot topic right now, and that is probably because there's a lot of uncertainty. Whether it's markets or politics and changing policies, how better to add in certainty for the future than bringing a pension plan into your retirement planning,” says Stacey Parker-Yull, director of policy, strategy and communications for Medicus Pension Plan.
Doctors have actually been calling for pensions for years. In 2019, a petition asking the Canadian Medical Association to launch a national program gathered over 9,000 signatures.
That project never manifested, but there are choices on the market now, with doctors having to determine which one could work best for them.
Provincial pushes
The biggest news in physician retirement has come via new province-specific offerings. In January, the Healthcare of Ontario Pension Plan (HOOPP) began allowing doctors in Ontario to join its long-established defined benefits plan. A defined benefits plan offers secure retirement income via monthly payments for as long as you live, plus survivor benefits to a spouse. This is significantly different from defined contribution pension plans or group RRSPs, whereby future retirees accumulate a pile of money (often with contributions made or even matched by employers) and then need to decide how to spend that finite pile once retirement arrives.
“We were hearing from people over the years that there would be demand,” says Rachel Arbour, head of plan benefits, design and policy, on why HOOPP began accepting doctors. Indeed, since launch, the organization has been fielding numerous calls from doctors, with some signing up for this highly established pension that had $112.6 billion in assets as of the end of 2023.
How does it work? A physician’s medicine professional corporation (MPC) joins the plan as an employer, and the doctor receives the benefits after retirement. About 24,000 doctors in Ontario are eligible to join—but they have to assess if it makes sense.
“This is an important financial decision, and we don't want physicians making it quickly without talking it through with their financial advisors,” says Arbour. Joining entails a long-term commitment, the pension best supports those who plan to keep working in Ontario, plus physicians closer to retirement might need to “buy back” some years of service so their pensions will be large enough.
This follows the October 2024 launch of the Physician Retirement Fund by the government of Nova Scotia. The unique program—aimed at recruitment and retention—offers those working in the province money they can invest in the retirement vehicle of their choice. Longtime doctors can get up to $15,000 annually, with lower amounts available for fewer years of service.
“The fund helps newly practicing doctors set themselves up for success and encourages continued clinical practice in the province for those physicians further along in their medical careers,” the Department of Health and Wellness of Nova Scotia said in a statement.
Also last October, in advance of the provincial election, the B.C. College of Family Physicians and B.C. Family Doctors worked together to make a series of asks of the incoming government, a pension plan being one of them.
“Family doctors are the foundation of our health care system, yet most do not have access to a pension plan. Unlike most other health care professionals, family doctors, who are typically independent contractors, are forced to fund their own retirement,” they say in a joint statement to the Medical Post, but did not offer an update on whether the provincial government has taken any action on this front.
Private options
For the past few years, the private sector has been working to offer pensions geared directly at doctors. That includes Medicus Pension Plan, a collaboration between Scotiabank and MD Financial Management that launched in 2023. This is a multi-employer pension and defined benefit plan now available in six provinces and three territories.
“It’s a new option and the only plan of its kind in Canada. We do have to educate physicians about it,” says Parker-Yull. Medicus is not exactly the same as HOOPP, for instance, with different rules around contributions, spousal benefits and what happens if you want to leave the plan.
“With Medicus you have geographical mobility,” notes Parker-Yull, so doctors can stay a member and keep contributing if they move. (The company is negotiating to have the program operate in all 10 provinces.)
In 2022, Dr. Tran took on a side hustle and launched the CPPP, which operates differently again. He says it offers defined benefits but also tax-friendly features, has more flexibility around contributions, allows for semi-retirement, plus it has more generous benefits for surviving spouses and families.
The plan has just 30 members, and he is concerned that, despite the many upsides, it may not grow as rapidly as other doctor-oriented pensions. “My plan is the Mercedes Benz of the pension world. But unlike Mercedes Benz, I don’t have the marketing power.”
The other private pension plan on the market is called Blue Pier, it was the first and came out in 2020. (It is not currently heavily promoted by the company.)
Demand is real
Doctors need to do careful retirement planning more than ever. Canadian doctors laregly retire between age 60 and 69—according to a study dating back to 2016—with “excessive workload and burnout” common reasons for wrapping up work. Work pressures are higher now, as is the cost of living.
“There's a big recognition that financial well-being is so important for overall well-being,” says Parker-Yull, adding another reason why retirement planning matters.
And while choice in the market is a good thing compared to there being no doctor-specific pensions on offer at all, Dr. Tran worries about his fellow doctors—many of whom have focused heavily on their careers to the detriment of their personal finance expertise.
“If you ask how many physicians would want a pension plan, I would say 99 per of us,” he says. “We’ve heard of all these amazing plans for healthcare workers and teachers. We all want them, but we don't know what they are.”
