Many private physician groups have a Professional Service Agreement with a hospital. If the hospital is a non-profit organization, then the physician group has the opportunity of taking advantage of TRIA.
The physician group may choose to have the hospital re-direct their PSA payments into TRIA. These contributions would be pre-tax and unlimited.
Due to non-profit accounting, the hospital would would also benefit greatly under this arrangement.
As TRIA is independently administered, the hospital has no administrative duties.
The ability for a privately owned company to participate in TRIA is a unique opportunity, availing them of a program that no other private company has access to.
The members of the physician group can choose to either receive their share of the PSA as taxable compensation, or volunteer to have it allocated pre-tax into their TRIA Plan.
Many private physician groups have implemented a Cash Balance pension plan in order to reduce the taxable income on highly-compensated physicians. While better than doing nothing, these pension plans come at a high cost due to their low returns. Participants are really overpaying for the projected benefit. More importantly, all distributions from pension plans are 100% income taxable.
When you compare the taxable income from a pension plan to the tax-free income from TRIA, the income from TRIA is usually more than double the net after-tax income from a pension. This can make a huge and meaningful difference in the quality of lifestyle during retirement.