Thanks to Arlington, Virgina “Tax Analysts – tax information worldwide.”
In 1998 Kaiser wrote to the IRS ((LTR 9810005)( https://businesspractices.kaiserpapers.org/ltr-9810005-as-it-applies-to-the-permanente-pension-plan/))to get special permission to hold the Permanente benefit package under the Kaiser non-taxed umbrella (501)(c)(3) to be released to the Permanente physicians as they retired. Done in this form, Permanente would not be taxed as the money accrued.
This is called a grantor trust. This was a change from Permanente simply billing for such payouts as they occurred. (It also answers my question of why Southern California Kaiser Permanente Group chose partnership rather than following the corporate approach of Northern California (The Permanente Medical Group or TPMG, Inc.)
On the other hand, this fund is not reachable by Kaiser creditors. “The point of LTR 9810005 was for the doctors to have the promises funded, have the funds beyond the reach of creditors, have the setting aside of the funds to go untaxed, and have the investment go untaxed. In short, the doctors sought to obtain the benefits of a qualified retirement plan without the accompanying restrictions.” (Page 1462 of Tax Notes March 23, 1998 by tax expert and author – Lee A Sheppard).
The doctors get a printout of their stake in this fund at regular intervals. The IRS allowed the exception but only on the marginal theory that the public good might outweigh the private benefit.
The Permanente physicians have an ENORMOUS reason to cut corners on patient care at Kaiser. It is not only to have a good future organization with which to bargain but it is to realize their own accumulated work product from the past. Since the retirement package at Kaiser is very generous, it is like having 25% of your salary held back to make sure you play the game right until the day you retire. And since you have no contract at Kaiser, you serve to some extent on whim. In fact, they have moved away from the tenure approach of the past and run more on cooperative whim – a perfect way to herd cats.
This better explains to me how a certain Kaiser physician in Fresno was able to accumulate $500,000 in value from Kaiser just four years out of training in New York. Deposing him on rapid net gain income will help, someday, to crack open this Death Star.
I’m from Chicago. As a city we took down the Chicago mob and Al Capone through the IRS, not by catching each act of murder or deception within the cult of silence. Kaiser is just another mob racketeering within, extorting from, and killing off the middle class and their parents. Dr. Chuck Phillips