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Retirement

Beyond 401(k) or 403(b) Plans - What Extra Retirement Benefits Do Top Hospitals Offer?

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By Bill Martin, CFA 

Published December 12, 2023

In the diverse landscape of healthcare systems, employees typically receive retirement benefits, often in the form of standard 401(k) or 403(b) plans with employer matching. Some healthcare institutions distinguish themselves by going beyond these basics, providing physicians with additional retirement benefits to bolster their financial security.


At Earned Wealth, we've taken a closer look at the retirement packages offered by top hospitals. In a sample of top hospitals, detailed in the table below, the most common additional retirement benefits were: 457(b) and defined benefit pension plans.  Although we did not analyze all major hospitals, we hope that this sample analysis empowers physicians to double-check their plans and make sure they are maximizing their retirement savings.



Location / Size

Retirement Plan Options

Mass General Brigham

- Facilities across Massachusetts - 5 licensed and 15 affiliated community health centers

- Defined benefit pension plan - 403(b) - Retiree Medical Savings Account

University of California

- Facilities across California - 30 academic health centers, health professional schools, children’s hospital campuses and a Global Health Institute

Primary retirement benefit: - Pension Choice (defined benefit plan) or - Savings Choice (defined contribution plan) Supplemental retirement options: 403(b) 457(b) Defined Contribution Plan

Beth Israel Lahey Health

- Facilities across Massachusetts - 14 community and specialty hospitals, academic medical centers and teaching hospitals

403(b) 457(b) non-qualified deferred compensation plan

New York Presbyterian Hospital

- Headquartered in New York City - Nation's largest not-for-profit, non-sectarian hospital with 5 major centers and 190+ locations

Defined benefit pension plan 403(b) tax-deferred annuity

Providence St. Joseph Health

- 51 hospitals nationwide

401(k) 457(b)

University of Pittsburgh Medical Center (UPMC)

- Headquartered in Pittsburgh - Serving 40 hospitals

403(b) 457(b) Defined benefit pension plan

Houston Methodist

- Located throughout greater Houston - 8 hospitals, an academic institute, a primary care group, and more than 300 locations

403(b) tax-sheltered annuity Defined contribution plan

Jackson Health Systems

- Located in Florida - Comprised of 8 hospitals

Defined benefit pension plan 403(b) 457(b)

Mayo Clinic

- Primary located in Arizona, Florida, and Minnesota - 16 hospitals, 53 multispecialty clinics and one mobile health clinic

Defined benefit pension plan 403(b) 401(k) 457(b)

John Muir Health

- Locations throughout Contra Costa County and parts of Alameda and Solano counties - Two major hospitals

Defined benefit pension plan 403(b) Retiree Health Reimbursement Account



457(b) deferred compensation plan


The 457(b) retirement plan is a valuable benefit that can be offered by nonprofit and government hospital health systems. In contrast, 457(b) plans cannot be offered by for-profit institutions.  457(b) plans work much like 401(k) and 403(b) plans with two key distinctions. First, typically, savers only need to be separated from an employer (not hit a certain age) to start withdrawals or — in some cases — savers may be required to liquidate the savings when they stop working for the employer. Second, if you have access to another employer-sponsored retirement plan, like a 401(k) or 403(b), you are allowed to contribute the employee maximum to both plans. Notable health systems, such as the University of California and the Mayo Clinic, provide this benefit. 


Pension plan


Some top hospitals, like New York Presbyterian Hospital and University of Pittsburgh Medical Center offer an additional retirement benefit - a defined benefit plan also known as a pension plan. Defined benefit plans provide hospital employees with a specific amount of income during retirement, based on a formula that considers factors such as the employee’s salary history and years of service. Unlike 401(k) and 403(b) plans, the employer bears the investment risk and is responsible for funding the plan.


Other retirement benefits and bonuses 


In some instances, individual institutions offer unique retirement packages. For example, Mass General Brigham offers a Retiree Medical Savings Account allowing benefits-eligible employees age 50 or older to save up to $4,500 per year for retirement medical expenses. Similarly, John Muir Health provides a Retiree Health Reimbursement Account, contributing funds for health care expenses upon retirement. These examples highlight the growing trend of health systems recognizing the importance of retirement planning and financial well-being. While unique to specific institutions, physicians are encouraged to review their retirement plans thoroughly to take advantage of any distinctive benefits offered by their employers.


Other large institutions offering useful benefits include Jackson Health Systems, Providence St. Joseph Health, Houston Methodist, and Beth Israel Lahey Health, among others.


Make sure to thoroughly review all retirement offerings


In summary, healthcare systems nationwide offer diverse retirement benefits beyond conventional 401(k) and 403(b) plans. Physicians are encouraged to closely analyze their retirement options so that they don’t miss potential advantages. As high salaried employees, physicians should consider ways to reduce their taxable income, including maximizing their contributions to employer-sponsored retirement plans.


Earned Wealth (a DBA of NoHo Financial, Inc) is an SEC-registered investment adviser located in New York City, NY. Registration as an investment adviser does not imply a certain level of skill or training.Earned Wealth's website is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publication, and links. All examples are for illustrative purposes only and may not be relied upon for investment decisions. The publication of Earned Wealth's website on the Internet should not be construed by any consumer and/or prospective client as Earned Wealth's solicitation or attempt to effect transactions in securities, or the rendering of personalized investment advice over the Internet.A copy of Earned Wealth's current written disclosure statement as set forth on Form ADV, discussing Earned Wealth's business operations, services, and fees is available from Earned Wealth upon written request. Additional Information about Earned Wealth and our advisors is also available online at https://adviserinfo.sec.gov/.Earned Wealth does not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.We are neither your attorneys nor your accountants and no portion of this material should be interpreted by you as legal, accounting or tax advice. We recommend that you seek the advice of a qualified attorney and accountant.Investing involves market risk, including possible loss of principal and investment objectives are not guaranteed.

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