When SCPMG Associate Physicians Become Partners: The Financial Changes to Plan for
You just got the news. You made partner at Southern California Permanente Medical Group (SCPMG).
Congratulations. Seriously. You've earned it.
But here's the thing you might not know: Your benefits package is about to change. And some of those changes have significant financial implications that you need to understand now, not six months from now when you're trying to figure out why your paycheck looks different or why certain benefits disappeared.
We work with SCPMG physicians, and we’ve seen this happen. An associate made partner, got excited about the new title and compensation structure, and then was blindsided by benefit changes they didn't see coming.
So let's walk through some of the changes when you become a partner and what you need to do about them.
Your Keogh Contributions Are About to Start
If you made a Keogh Plan election during your personal plan election period as an associate, those contributions are about to kick in.
Here's how it works: Your Keogh contribution is based on three things: your contribution level (25%, 50%, 70%, or 100%), the Keogh contribution percentage for the year (up to 15%), and your eligible compensation as a partner.
Let's say you elected the 50% contribution level and you're earning $350,000 in eligible compensation as a new partner. Your Keogh contribution would be 7.5% of that $350,000, which comes out to $26,250 for the year.
That's not pocket change. It's being deducted from your paycheck, and it's happening whether you were thinking about it or not.
Now, this is a good thing because you're building significant retirement savings with pre-tax dollars. But it does mean your take-home pay as a new partner might not jump as much as you were expecting. Plan accordingly.
Note: If you didn't make a Keogh election when you were eligible, you won't participate in the Keogh Plan as a partner. That election period was your one shot, and it's not coming back.
Your Disability Coverage Just Changed
As an associate, if you got sick or injured and couldn't work, you had short-term disability (STD) coverage. As a partner, you're now covered under the Compensation Continuance Program (CCP) instead. Here's the difference:
Short-Term Disability (Associates, as of 2026):
Paid 50% of the first $6,724 of your base weekly earnings
Weekly maximum: $3,462
Waiting period: 14 or 30 days, depending on your class
Maximum duration: 22 or 24 weeks
Compensation Continuance Program (Partners):
Pays 60% of your base monthly compensation
No cap on the weekly maximum
Waiting period: 30 days
Maximum duration: 22 weeks
The shift to CCP is generally better for partners because there's no dollar cap on what you can receive. But the waiting period and duration are roughly the same, so you're still looking at about five months of coverage before long-term disability (LTD) kicks in.
Speaking of LTD: As a partner, you're now automatically enrolled in coverage. You don't pay for it directly, but it's part of your benefits package.
The LTD benefit pays the lesser of 50% of the first $40,000 of your pre-disability earnings or 60% of your pre-disability earnings, reduced by other income sources. The monthly maximum is $20,000, and there's a 180-day waiting period.
Here's the thing that catches people off guard: If you're earning $400,000 or more as a partner, that $20,000 monthly maximum might not come close to replacing your income. You might want to look at supplemental disability coverage to fill that gap, especially if you've got a mortgage, kids in private school, or other fixed expenses that don't go away if you can't work.
Your Life Insurance Coverage Increases (Probably)
As a partner with more years of service, your Permanente Provided Life (PPL) insurance coverage is likely going up.
Here's the formula:
Less than 36 months of qualifying service and less than 5 years of credited service: 1x your base annual compensation (up to $2 million max)
5-15 years of credited service: 2x your base annual compensation (up to $2 million max)
15+ years of credited service: 3x your base annual compensation (up to $2 million max)
So if you've been with SCPMG for seven years and you're now making $350,000 as a partner, your PPL coverage would be $700,000.
That's a meaningful increase, but here's something to remember: The premiums for PPL insurance are considered taxable income for partners and are included in your annual Schedule K-1 Tax Form.
Bottom line: Your life insurance just went up, which is good. Meanwhile, you’ll want to make sure you've updated your beneficiary designations to reflect your current wishes. A surprising number of people still have an ex-spouse or a parent listed from 10 years ago.
You Now Have Access to Partner-Only Benefits
There are a few benefits that are available once you make partner.
The big one is the Early Separation Program, which allows you to retire between ages 58 and 65 and collect a temporary annuity equal to what you'd receive as a single life annuity at 65. Participation requires board approval, but it's an option that didn't exist when you were an associate.
You may also have access to the Common Plan, a non-qualified deferred compensation plan sponsored by the Kaiser Foundation Health Plan. You don't contribute to it or direct investments — it's automatic for eligible physicians — and it provides lifetime monthly income in retirement. Eligibility depends on your years of service (you must stay at least 10 years to vest), and the benefit increases the longer you stay. It's worth confirming your specific eligibility with SCPMG's benefits department.
Your 401(k) Strategy Might Need to Shift
As an associate, you may have been making traditional after-tax contributions to your 401(k) to maximize savings. Once your Keogh contributions start, you'll want to revisit that strategy.
Your Keogh and 401(k) contributions are subject to combined IRS limits, and your Keogh will eat into the room you had for traditional after-tax contributions. If you don't adjust, you could end up over-contributing — and dealing with a refund and tax headache the following year.
Your traditional pre-tax and Roth 401(k) contributions can stay the same. But if you were making additional after-tax contributions, take another look at the numbers.
What You Should Do Right Now
If you just made partner or you're about to, here's your checklist:
Review your Keogh contribution election. Pull out whatever paperwork you filled out as an associate and remind yourself what you elected. That's about to become real money coming out of your paycheck.
Update your budget for the transition. Your gross compensation is going up, but your Keogh contributions are starting. Model out what your actual take-home pay will look like so you're not surprised.
Check your disability coverage gap. If you're earning significantly more than $240,000 as a partner, that $20,000/month LTD cap might not be enough. Run the numbers to see if supplemental coverage makes sense.
Update your beneficiaries. This includes your Keogh, your 401(k), your PPL, and your health savings account (HSA) if you have one. Make sure they reflect your current life, not your life from five years ago.
Revisit your 401(k) contribution strategy. If you were making traditional after-tax contributions as an associate, recalculate how much room you have left after your Keogh contributions start.
Review your life insurance needs. Your PPL coverage went up, which is great. But is it enough? If you've got a young family, a big mortgage, or other financial obligations, you might still need supplemental coverage.
This Is a Good Problem to Have
Look, all of these changes are happening because you just got promoted to partner. That's a win. Your income is going up, your retirement savings are growing, and you've got more benefits than you did before.
But the transition comes with complexity. And the worst thing you can do is ignore that complexity and hope it all works out.
We work with SCPMG physicians at all career stages, and we see the difference it makes when people take the time to understand these changes and plan for them intentionally rather than reactively.
If you're making the associate-to-partner transition and you want help thinking through what it means for your financial plan, give us a call at (909) 296-7977 or visit evermont.com to set up a time to talk.
Keep building your future—and congratulations again on making partner.
This material was written in collaboration with artificial intelligence (Claude) derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.