Keogh Plan
Upon attaining partnership, physicians are eligible to participate in the Keogh Plan, officially known as the Southern California Permanente Medical Group Retirement Plan. The Keogh Plan is a defined contribution plan designed to qualify for certain tax advantages under IRS Code Section 401(a). This plan allows Partners to make tax-deductible contributions to a retirement plan that accrue tax-deferred earnings until distributed from the plan at retirement from the partnership.
Election to participate or not participate in the plan is irrevocable and occurs no later than six months after commencing employment with SCPMG. Electing to participate in the Keogh Plan is an irrevocable commitment to make an annual contribution of the amount required for the selected level of participation. If a physician does not elect to participate by the sixth month after his/her employment with SCPMG, s/he will not be able to commence participation at a later date.
Physicians can choose the 100 percent contribution level or the 70 percent contribution level. Changes in the level of participation are not permitted once an election has been made.
For example, the 2002 100 percent contribution level is 12.2 percent of Partnership Income* up to $27,790 and the 70 percent level is 8.54 percent of Partnership Income* up to $18,675. The percentage is determined each year by the Retirement Plan Comparability Formula and the SCPMG Board of Directors. Each year by mid-year, the current year's percentage is determined.
* Partnership Income is a Partner's annual income from SCPMG including Imputed Income and Year-End Performance Draw, adjusted to take into account the deduction for unreimbursed business expenses and self-employment taxes.
For plan year 2002, Federal law limits the amount of contributions to all defined contribution plans to the lesser of the combined individual plan limits for Keogh and TSR or $40,000. This limit applies to the Partner's combined Keogh and TSR contributions. Contributions to the plan are the Partner's own earnings and are not matched by SCPMG. There are several investment funds available with varying degrees of risk and return potential. These funds are chosen by the SCPMG Retirement Commitee with final approval by the SCPMG Board of Directors, and funds may change from time to time. A Partner may: |
