The Permanente Physicians Retirement Plan (PPRP) is a defined benefit plan. The base retirement benefit provides a monthly income for life beginning at age 65, based on years of credited service and the annual average of the highest three years of compensation in the last 10 years.

The formula is 2.75% x years of credited service up to 20 years x 8/11 of the average annual compensation, plus 1.375% x years of credited service over 20 years x 8/11 of the average annual compensation. The IRS limits dollar amounts that can be paid annually from a defined benefit plan. Benefits in excess of legal limits for qualified retirement plans are currently paid under the non-qualified Supplemental Employee Retirement Plan.

One hundred percent vesting occurs upon completion of five years of service. An annual contribution is made by HPMG to the Permanente Physicians Retirement Plan.

Savings Plans

This plan provides a means for participants to accumulate retirement benefits through tax-deferred contributions. The funds are professionally managed in a variety of stocks, bonds, T-bills, and money market funds, determined by the physician's election. The physician may elect to make a salary-deferral contribution to the Profit Sharing Plan upon date of hire. Upon completion of two years of service, the physician is eligible for employer contributions to the Profit Sharing Plan. The physician may borrow up to 50% of his or her account funds to a maximum of $50,000.