Partial Retirement Plan

[stickyshift]

Our practice is considering the option of offering 0.8 FTE for shareholders desiring to cut back on their hours.

As of now, salient provisions include:

1. Part-time for up to 10 years, cumulative
2. Retention of shareholder status

Does anyone have any experience with these kinds of arrangements in their practice? Any thoughts on how this can be done without blowing up our practice?

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[octopusprime]

Given the current 500 pt slide of the stock market i'd include a discussion about the upcoming recession...

 

[octopusprime]

assuming the 0.8 of the time they are there includes an equivalent reduction in the amount of vaca they could take in that time?
Is their shareholder status 0.8 of any tangible assets?

 

[stickyshift]

assuming the 0.8 of the time they are there includes an equivalent reduction in the amount of vaca they could take in that time?
Is their shareholder status 0.8 of any tangible assets?

There is no reduction in vacation. Coverage issues are of some concern, since we operate multiple sites that would require coverage, possibly by floaters.
We don't really have much in the way of tangible assets--no independent lab.
They would get a 0.8 share of the year-end bonus.

 

[Dave CX]

Doesn't sound particularly complicated to me.

 

[AZpath]

People like to change their minds.
Do they have a vote in decisions after the part time move ?

I have seen a few partners decide to have undue influence at part time status
This included going back to full time without the consensus of other FT members

 

[Doormat]

Bad idea. A shareholder physician at 0.8 for up to 10 years will have one foot out the door for a very long time. A pathologist on a glide path with reduced hours has little incentive to take on new and innovative projects. They are not hungry to attract (beg for) new business, bring in new tests, and make a name for themselves. If a 0.8 pathologist is a medical director and has a 3 month inspection window with CAP, will they be fly fishing or drinking a cocktail in the tropics when the inspectors arrive? IMO this is an attempt by senior partners to fatten up and enjoy the good life at the expense of the younger people in the group. New investors pay off the old investors....

 

[LADoc00]

I would never agree to that. I WANT partners to fully retire or commit to being in the game at 110% effort. This sounds like you are building a mechanism to carry dead weight for a decade. Nightmarish IMO. To each his own. Why stop there? why let some 90 year old who can still crawl through a 0.2 FTE workload get a 1/5 FTE shareholder distributions?

 

[caffeinegirl]

Not recommended. Had a partner like this who then decided never to answer the phone when on call. It's a slippery slope.

 

[Torsed]

I would not do it. Work 100 percent or not. Some people will end up working harder to cover the others.

 

[chooks]

Agree with the sentiment that this is not advisable.

 

[Guest8]

My group has done this for many years without much issue. It isn't so much for partial retirement (partnership ends at 65 no matter what), but for people that may prefer less hours for whatever reason. For some they have young kids and want to be home more, others just want to work 4 days a week rather than 5 (like most in medicine do other than path). We haven't had any real issues with it, and the people at 0.8 share (or 0.9 share) do just as much work on the days they're here and cover just as much call. Shrugs.

 

[stickyshift]

We're thinking maybe reduce it to 3 years with continued partnership, and then extensions with continued employment as a non-shareholder.

 

[bosco77]

I work at 0.8
It's fantastic.
Totally recommend it.
I have a little less money in the bank but I travel enough to speak 3 languages now.

 

[stickyshift]

I work at 0.8
It's fantastic.
Totally recommend it.
I have a little less money in the bank but I travel enough to speak 3 languages now.

Good if you can get it.
Is there a problem with so many shareholders going into partial retirement that it becomes more difficult for the younger ones to obtain this benefit, given the need for more coverage from those who are still full-time?

 

[LADoc00]

If EVERYONE in the a group is doing a 4-day work week that is an entirely different situation than say having 2 classes of partners with one grinding M-F.

Let's not muddy the waters on what the original ? was by saying I work 4-days a week and its awesome, thats not the point.

If one partner goes 4-day/week then pretty much ALL the partners need to do the same IMO. Again this is my opinion, but an appropriate analogy would be a couple that decides to have an "open relationship." The partner who suggested it likely already has a crew of suitors lined up and will dive in asap while the other partner will look on anxiously, jealousy slowly building until SHTF.

This is basic human psychology. You dont need to know much more than this and the fact the path groups economically are structured as communist collectives and not like surgical groups where you EWYK (eat what you kill).

To the OP: this DOES NOT work in the compensation model of most standard pathology practices. You dont need our anon input, do online research or contact a lawyer friend who has a practice structured like a pathology group. This is serious stuff, do not take it lightly.

 

[bosco77]

I dont work 4 days a week but take more full weeks off.
My salary + benefits are 0.8 but I still do full call coverage

I'm not sure what all these analogies and freakouts are about
It is rather simple to schedule and everyone is compensated as to their level of work.

 

[chooks]

I guess it depends on your practice and what is expected of shareholders. If they are 80% FTE (but presumably 100% full voting share...), are they really going to be busting their balls doing business development, managing clients, dealing with employee HR issues, unexpected trips to remote sites to manage issues on-site as needed, cover the new tumor board at 6:30 AM or the new standing meeting with admin at 5:30 at night, ironing out operational issues, etc...? What about the increase load on others not just with them being reduce 0.2, but not being around to handle questions/calls about their cases (which is the case with any PT FTE).

Listen - it's probably a sweet gig to be an owner and not have to worry about any of those things or have an ownership group that is OK with an owner soft-pedaling on those things. If you can swing it, great for you. But IMHO, a glidepath out of full time means a glidepath out of ownership. No reason they can't stick around as a PT employee. I wouldn't give equal say in how the company is run with someone who is only around 80% of the time. Especially for 10 years. Resentments will build at the inevitable inequities, especially as times get harder (as they will). Just my $0.02.

 

[AZpath]

I guess it depends on your practice and what is expected of shareholders. If they are 80% FTE (but presumably 100% full voting share...), are they really going to be busting their balls doing business development, managing clients, dealing with employee HR issues, unexpected trips to remote sites to manage issues on-site as needed, cover the new tumor board at 6:30 AM or the new standing meeting with admin at 5:30 at night, ironing out operational issues, etc...? What about the increase load on others not just with them being reduce 0.2, but not being around to handle questions/calls about their cases (which is the case with any PT FTE).

Listen - it's probably a sweet gig to be an owner and not have to worry about any of those things or have an ownership group that is OK with an owner soft-pedaling on those things. If you can swing it, great for you. But IMHO, a glidepath out of full time means a glidepath out of ownership. No reason they can't stick around as a PT employee. I wouldn't give equal say in how the company is run with someone who is only around 80% of the time. Especially for 10 years. Resentments will build at the inevitable inequities, especially as times get harder (as they will). Just my $0.02.

I had partners that wanted to hire a new employee FTE that was scheduled to go partner in about 3 years.
This was premature in that it caused the group to be overstaffed by .5-6 FTE.

I pointed out our income would drop 40K each to start.
Two of the oldest partners said that they were going to 0.8 to compensate. The group said ok. This last about 6 months. Then they both decided they missed the money. We all ended up taking a big hit when the came back to work.

Put strict time limits ( 2 yrs ) and no voting rights once they go part time.
By the way, this part of the reason I left this group. Governance has be left to the remaining members IMO