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  • Hospital deferring retirement match

    I was unsurprised to get an email from our hospital today saying they are deferring our matching retirement contributions in order to save resources for patients. My question is - are there systems that are as fiscally responsible as we are? Yes, this corona virus situation is very difficult. But until 2 weeks ago we were in the black with good volume. All of us here (well, most of us) have emergency funds, live below our means, and are not so precarious that this situation will within two weeks led to a failure to meet obligations. I would like to be part of a system that has similar financial resilience. What are others experiencing?

  • #2
    you are not alone
    https://www.whitecoatinvestor.com/fo...-for-employees

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    • #3
      clarify “deferring retirement match”

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      • #4
        Don't worry, CEO and the other 500 admins are still at 100% compensation. Just as in 2008, once this ************************ storm clears, I'd expect many admins getting fired to cut the "admin fat," but that savings will be passed onto the CEO and remaining admins and not nurses, pay, masks, other employees.

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        • #5
          my wife's physician's group just announced they are lowering their match percentage contribution by 90% for the next 3 months. I guess they can just do that? you're not alone. this is an out-patient clinic and they say they have been losing $5m/day since March 16

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          • #6
            I do understand I’m not alone in this situation . I guess I’m just shocked it happened so fast.

            I was also mobilized yesterday, so a lot less money is going to be coming in. But that’s why my house is 1x my annual income and we save. I guess I assumed the hospital could get through at least a few months.

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            • #7
              Originally posted by gvs.psych View Post
              I do understand I’m not alone in this situation . I guess I’m just shocked it happened so fast.

              I was also mobilized yesterday, so a lot less money is going to be coming in. But that’s why my house is 1x my annual income and we save. I guess I assumed the hospital could get through at least a few months.
              A hospital can get through a couple months, but it may crash much farther in advance without changes.
              Two different boats. Even with the best intentions, its not the same. Cruise ship or a ski boat or a jet ski, 15 miles to stop vs 25 yards.
              One large healthcare system : 6700 physicians, 27000 employees, 300 delivery sites, 17 hospitals and well the point is its just different. How long will it take to stop? Couple of months? It can be with the best intentions, the financial stability makes it prudent to make some adjustments. Not easy for the hospital or the employees. I doubt seriously anyone knows when this will end and is simply doing the best they can. You think it's 6 month's? Just curious about any suggestions. That is neither pro nor con. It's a big problem for all.

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              • #8
                My match comes sometime in the second quarter as a lump sum for all of last year. That's the way it's been for the past several years. It is only 3% right now but it is based on seniority. Nobody has said anything about it not coming this year I would not be surprised if that happens.

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                • #9
                  Cutting match prolongs how long they can pay salary. Personally I would be reassured to see my employer reacting quickly and taking the magnitude of the threat seriously. Waiting to be forced to cut the match would put survival of the organization at risk and can be a fatal mistake.

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                  • #10
                    Originally posted by Shant View Post
                    Cutting match prolongs how long they can pay salary. Personally I would be reassured to see my employer reacting quickly and taking the magnitude of the threat seriously. Waiting to be forced to cut the match would put survival of the organization at risk and can be a fatal mistake.
                    It can be interpreted 2 ways. Are they being proactive in order to ensure long term survival or are they using it as an excuse to take away benefits to improve the bottom line, etc.? Many are probably doing it to ensure long term survival, however, I'm guessing lost wages/benefits won't come back as fast as they went away.

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                    • #11
                      "deferring" a match is not the same as "cutting" or "taking away" a match


                      as I said in another thread, an employer can not simply take away or cut an employer retirement contribution that is written into the retirement plan document and / or employment contract

                      In other words, a true matching contribution (safe harbor basic or enhanced match) or 3% nonelective safe harbor contribution can legally be "deferred" as in the contribution can be made at a later date, but such contributions can't legally be eliminated. An employer has until their tax filing deadline to actually make these employer contributions. They are not mandated to make the contributions concurrent with every payroll. If cash flow is down an employer may elect to wait to make the contributions but they will still have to make the contributions at a later date.

                      If this is the case perhaps you hope the market keeps going down. You'll end up buying at a lower price.


                      Discretionary profit sharing contributions are a different animal. Such contributions could be eliminated, hence the fact they're called discretionary. The idea is these are "sharing of profit".

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                      • #12
                        What worries me is if my non-governmental 457b will eventually be at risk. Prior to this COVID-19 mess my institution was on very sound financial footing, but like everyone else I'm sure the cancellation of elective procedures is having a bad impact on our bottom line. First world problems, I know, but right now I wish I had put less money in that thing.

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                        • #13
                          Originally posted by artemis View Post
                          What worries me is if my non-governmental 457b will eventually be at risk. Prior to this COVID-19 mess my institution was on very sound financial footing, but like everyone else I'm sure the cancellation of elective procedures is having a bad impact on our bottom line. First world problems, I know, but right now I wish I had put less money in that thing.
                          I agree. My community would be devastated if we lost my hospital but it is possible. I have maxed out the 457 since I found WCI and learned of its existence 2 years ago. So I really do not have that much in there right now and even less then a few months ago :P

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                          • #14
                            Originally posted by Lordosis View Post

                            I agree. My community would be devastated if we lost my hospital but it is possible. I have maxed out the 457 since I found WCI and learned of its existence 2 years ago. So I really do not have that much in there right now and even less then a few months ago :P
                            Alas, I have about 600k in that thing, so losing it would really, REALLY hurt. That's about half of my dedicated retirement money. But when thinking about the events that could cause a hospital to founder, I bet a pandemic wasn't on anyone's radar. It certainly wasn't on mine!

                            What's done is done, though. Until I retire, there's no way to get that money out. So I'll just have to live with any losses that may end up happening.

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                            • #15
                              artemis, you can just quit, right? then you'd have access to the whole 600k. either way, yes a very tough situation to be in. WCI writes about the risks of a 457 and he does mention why it's a bad idea and this is one of them. we all understood the risks, presumably. really stinks

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