Investigate retirement fund options when joining hospital system

It's important to keep tabs on your retirement accounts when making a job transition. See what you need to think about when moving from a solo practice to a hospital system.

Q: I'm a solo primary care practitioner, and I've received a buyout offer from the local hospital system. If I accept the offer, how can I make sure that my retirement savings are protected when I join the system?

A: If you have qualified plans, such as a 401(k) profit-sharing plan or a defined benefit plan, those assets may be rolled into the purchasing company's qualified plans, provided that its plans allow for this move. Most plans permit new employees to roll over monies from similar plans or even to roll over individual retirement accounts (IRAs). The other option may be to terminate your plans and roll over the funds into an IRA in your name.

Without knowing the particular circumstances regarding your practice and what the hospital offers, it is difficult to fully explain all potential options. If you decide to keep your monies in a qualified plan, the regulatory body that governs those plans and protects employees' interest is the U.S. Department of Labor.

If you have a qualified plan such as a 401(k) profit-sharing plan and/or a defined benefit plan, I would guess you have it overseen by a third-party administrator, who may have created the plan document that governs your plan. It would be a smart idea to consult with whoever helped establish the qualified plan, as well as your financial adviser, to discuss the options that are available to you.

In addition, you may want to ask the hospital's benefits department about the kinds of retirement plans it offers and what options it provides when moving your current plan's assets into them.

In some cases where a smaller practice that has a plan joins another that has a plan, it may be possible to continue both plans, but under the affiliated company's rules. In your case, it is unlikely that a hospital plan and your plan can be run independently. This topic can get a bit complicated, so it is wise to consult with all parties involved with your retirement savings to help ensure that you make the best decisions toward achieving your goals.

The answer to this question was provided by Jimmy Lee, CFS, managing partner and financial adviser at Strategic Wealth Associates, a wealth management firm with offices in Nevada, California, and Arizona.

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