LETTER TO House Staff Should Also Receive Retirement Benefits To the Editor: e read with interest the article by Morris et al,1 arguing for what we agree is a reasonable change in the compensation system for interns, residents, and fellows that is not based solely on postgraduate year attained as is the current system but on approximate benchmarked hours worked in each different training program, a change that would more fairly compensate all house staff. They have proposed several alternatives to achieve this change. We would like to add to this proposal that house staff receive 401k retirement benefits, with matching employer contributions. Medical students are graduating with ever-increasing debt (average educational debt of class of 2013 ¼ $169,000) and after training enter the workforce years
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after most of their peers. Student debt delays when individuals start saving for retirement, further compounding the problem. For these reasons, most house staff miss out on the advantages of compounding interest that are well known and argue for the early establishment of retirement investment accounts. For example, $10,0000 invested at the age of 25 years with an annual reinvested return of 5.5% will be worth nearly $100,000 at the age of 60 years whereas the same investment made at the age of 35 years would be worth approximately $60,000, a $40,000 difference. An annual investment of $5000 starting at the age of 25 years will be worth about $760,000 at the age of 65 years, assuming a 5.5% return compounded annually, whereas starting at the age of 35 years will yield a value of only $407,000. Providing 401k retirement benefits would help our debt-ridden house staff take advantage of compounding interest over a longer time period and would go far to reverse the alarming trend of those approaching retirement age who do not
have sufficient retirement savings. There will be strong objections from many saying we cannot afford it. But if we take the long-term view and its potential impact on retirement savings, can we afford not to? Finally, because the Internal Revenue Service (IRS) has determined that house staff compensation is taxable as wages and not a student stipend, shouldn’t they also receive in fairness the same benefits as other hospital employees? We would hope that 401k benefits could be added to the discussion about revising house staff compensation. Douglas W. Hanto, MD, PhD Mary E. Klingensmith, MD Department of Surgery Washington University School of Medicine St Louis, MO [email protected]
REFERENCE 1. Morris JB, Burke SV, Berns JS. Are we paying our housestaff fairly? Ann Surg. 2014;260:1–2.
Disclosure: The authors declare no conflicts of interest and no sources of funding. Copyright ß 2015 Wolters Kluwer Health, Inc. All rights reserved. ISSN: 0003-4932/14/26105-0821 DOI: 10.1097/SLA.0000000000000902
e8 | www.annalsofsurgery.com
Annals of Surgery Volume 263, Number 1, January 2016
Copyright © 2015 Wolters Kluwer Health, Inc. All rights reserved.
W
THE
EDITOR
after most of their peers. Student debt delays when individuals start saving for retirement, further compounding the problem. For these reasons, most house staff miss out on the advantages of compounding interest that are well known and argue for the early establishment of retirement investment accounts. For example, $10,0000 invested at the age of 25 years with an annual reinvested return of 5.5% will be worth nearly $100,000 at the age of 60 years whereas the same investment made at the age of 35 years would be worth approximately $60,000, a $40,000 difference. An annual investment of $5000 starting at the age of 25 years will be worth about $760,000 at the age of 65 years, assuming a 5.5% return compounded annually, whereas starting at the age of 35 years will yield a value of only $407,000. Providing 401k retirement benefits would help our debt-ridden house staff take advantage of compounding interest over a longer time period and would go far to reverse the alarming trend of those approaching retirement age who do not
have sufficient retirement savings. There will be strong objections from many saying we cannot afford it. But if we take the long-term view and its potential impact on retirement savings, can we afford not to? Finally, because the Internal Revenue Service (IRS) has determined that house staff compensation is taxable as wages and not a student stipend, shouldn’t they also receive in fairness the same benefits as other hospital employees? We would hope that 401k benefits could be added to the discussion about revising house staff compensation. Douglas W. Hanto, MD, PhD Mary E. Klingensmith, MD Department of Surgery Washington University School of Medicine St Louis, MO [email protected]
REFERENCE 1. Morris JB, Burke SV, Berns JS. Are we paying our housestaff fairly? Ann Surg. 2014;260:1–2.
Disclosure: The authors declare no conflicts of interest and no sources of funding. Copyright ß 2015 Wolters Kluwer Health, Inc. All rights reserved. ISSN: 0003-4932/14/26105-0821 DOI: 10.1097/SLA.0000000000000902
e8 | www.annalsofsurgery.com
Annals of Surgery Volume 263, Number 1, January 2016
Copyright © 2015 Wolters Kluwer Health, Inc. All rights reserved.
