'So what's he plundering at Western Peds?'
'You really don't need to know the details.'
He picked up his coffee cup and drank.
I thought back to my conversation with Lou.
Why would a syndicate buy it, then shut it down?
Could be any number of reasons... Ih~ wanted the oconpany's resources, rather than the company itself What kind! of resources?
Hardware, investments, the pension fund.
'The doctors' pension fund,' I said. jones manages that, too, doesn't he?'
He put down the cup. 'The hospital charter says it's his responsibility.'
'What's he done with it? Turned it into his personal cashbox>' He said nothing.
Milo said, 'Shit.'
'Something like that,' said Huenengarth, frowning.
'The pension fund is eight figures?' I said.
A healthy eight.'
'Come on, how's that possible?'
'Some luck, some skill, but mostly just the passage of time, Doctor.
Ever calculate what a thousand dollars left in a five percent savings account for seventy years would be worth? Try it some TIME
The doctors' pension fund is seventy years' worth of blue chip stocks and corporate bonds that have increased ten, twenty, fifty, hundreds of times over, split and resplit dozens of times, and paid out dividends that are reinvested in the fund. Since World War Two the stock market's been on a steady upward swing. The fund's full of gems like IBM purchased at two dollars a share, Xerox at one. And, unlike a commercial investment fund, almost nothing goes out. The rules of the fund say it can't be used for hospital expenses, so the only outflow is payments to doctors who retire. And that's only a trickle, because the rules also minimize payments to anyone who leaves before twenty-five years.'
'The actuarial structure,' I said, remembering what Al Macauley had said about not collecting any pension. Anyone who leaves before a certain period gets paid nothing.'
He gave an enthusiastic nod. The student was finally getting things right.
'It's called the fractional rule, Doctor. Most pension funds are set up that way-supposedly to reward loyalty. When the medical school agreed to contribute to the fund seventy years ago, it stipulated that a doctor who left before five years wouldn't get a penny.
Same goes for one who leaves after any time period and continues to work as a physician at a comparable salary. Doctors are very employable, so those two groups account for over eighty-nine percent of cases. Of the remaining eleven percent, very few doctors serve out the full twenty-five and qualify for full pension. But the money paid into the fund for every doctor who's ever worked at the hospital stays right there, earning interest.'
'Who contributes besides the med school?'
'You were on staff there. Didn't you read your benefits package?'
'Psychologists weren't included in the fund.'
'Yes, you're right. It does stipulate M.D.... Well, count yourself lucky to be a Ph.D.'
'Who contributes?' I repeated.
'The hospital kicks in the rest.'
'The doctors don't pay anything?'
