After salary and incentives are ironed out, retirement benefits become crucial to ensuring hospitals and health systems attract and retain the highest-performing executives, according to an article from Integrated Healthcare Strategies.
Linette Allison, vice president of operations and quality at Integrated Healthcare Strategies, wrote that initial cash-based compensation, like salary and bonuses, are the foundation of a competitive executive pay plan. However, retirement plans could have features that are "valued by the participant and build retention for the organization," she said.
Healthcare executives often received nonqualified retirement plans, which include supplemental retirement plans, or SERPs, pension restoration plans and other deferred compensation structures. Ms. Allison said a majority of these plans are structured as 457(f) or 457(b) plans.
According to a recent Integrated Healthcare Strategies survey, 63 percent of hospital and health system CEOs have a SERP, while 30 percent participate in a deferred compensation plan. "This level of prevalence indicates that some sort of nonqualified retirement benefit is crucial to providing a market competitive benefit program," Ms. Allison wrote.
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