Ontario expands pension plan to self-employed doctors previously excluded

Hundreds of self-employed physicians have expressed interest and more than 75 have taken steps to become part of the $123 billion Healthcare of Ontario Pension Plan, also known by its acronym pronounced “hoop.”

While the opening wasn’t created with the troublesome doctor shortage in mind, it can’t hurt, says a senior executive.

“If the ability to access the defined-benefit pension like HOOPP is the reason for a physician to set up shop in or stay in Ontario, that’s fantastic,” says Rachel Arbour, a lawyer and head of plan benefits, design and policy.

“But we’re here to provide really good pensions and retirement for health-care workers, and this is one of the reasons why we looked at growing our plan to physicians,” she adds. “We believe we play an important role in recruitment and retention. Health-care employers in our province can say to their staff ‘we can offer you a great pension.’”

The plan boasted a solid 9.7 per cent gain on global investments last year on behalf of 475,000 members and retirees in health care across the province. 

Opening the pension plan to self-employed physicians who have established their own medicine professional corporations and agree to pay a membership fee to the Ontario Hospital Association is the result of years of work and urging from within the health-care sector, including the Ontario Medical Association. The change to include self-employed doctors involved getting approval from Ontario’s pension regulator and the Canada Revenue Agency. 

The OMA offers a group retirement savings plan to its members — who include 31,500 practicing physicians — but recognizes that many would also like to have a traditional pension plan with defined benefits.

“It has a good track record,” says Kimberly Moran, a chartered accountant and the OMA’s chief executive officer, of the HOOPP pension.

While the shortage of an estimated 3,500 family doctors has many root causes, such as heavy workloads, long days and administrative paperwork, Moran notes the new pension offering provides “a little bit of help.” 

Recognizing it was politically vulnerable because of the doctor shortage, Premier Doug Ford’s Progressive Conservatives pledged $1.4 billion in new spending on the eve of Ontario’s Feb. 27 election campaign for expanded primary health-care teams, with Health Minister Sylvia Jones acknowledging “there’s no doubt people have been waiting a long time, too long, frankly, to get connected to a family-care practitioner in their community.” Ford has also added more spaces in medical schools and a new medical school is opening at Toronto Metropolitan University in Brampton next fall, but will take years to produce fully trained doctors.  

The OMA said 8,600 physicians have retired or left their practices since 2018, meaning two doctors are lost for every three new ones added to the health-care system. 

As many jurisdictions around the world compete with each other for med school graduates, more than 750 doctors have reached out to a HOOPP hotline about the pension plan after reading full details posted on the organization’s website.

They are encouraged to discuss the prospect of joining with their own financial advisors. 

“Every doctor is going to have a slightly different set of circumstances they’re going to have to work through and make sure that it makes sense for them,” says Moran.

Aside from paying a membership fee to the Ontario Hospital Association, which would not reveal the dollar value but said the cost is “modest” for doctors, physicians joining the plan make contributions both as the employer and the employee, based on income. Those contributions are tax-deductible. 

“It’s about half-and-half in terms of doctors who are sole practitioners and those who have staff with them,” Arbour says. “We would love the family physicians, their nurses, the receptionist, the whole bucket of people supporting that practice to come into our plan. The longer you’re in our plan, the bigger your pension income will be upon retirement.”