NUA Strategy for Medical Device Employees (Stryker, Medtronic, Boston Scientific, BD, Intuitive Surgical)

The medical device sector produces a wider spread of NUA outcomes than almost any other industry. Stryker (SYK) stands out as one of the most compelling NUA cases in the entire S&P 500 — 25-to-30-year employees who received employer match contributions invested in SYK stock at $42–$75/share during the 2009–2016 window now sit against a current price above $300/share, producing 4:1 to 7:1 ratios and $50,000–$150,000 or more in potential lifetime federal tax savings. But Medtronic, Becton Dickinson, and post-2016 Boston Scientific contributors face modest appreciation ratios and, in Medtronic's case, an Irish-inversion complication that confuses generalist advisors. The sector also has a significant state-tax trap: Minnesota (Medtronic HQ), New Jersey (BD Franklin Lakes), California (Intuitive Surgical Sunnyvale), and Massachusetts (Boston Scientific Marlborough) all tax long-term capital gains as ordinary income, which means employees in those states capture federal-only NUA benefit. The federal savings are real and often large — they just don't get a state multiplier. Here's the full breakdown by company.

Why medical device employees are NUA candidates

Several structural features of long-tenure medtech careers produce favorable NUA conditions — at least at some companies:

• Long careers with specialized skills. Regulatory affairs, R&D engineers, clinical specialists, and manufacturing quality employees at major device companies routinely spend 20–30+ years at a single employer. That's two or three decades of 401(k) employer match accumulation, often in company stock.
• Employer match invested in company stock. Stryker confirmed: the company match on the first 4% of an employee's contribution is invested in the Stryker Stock Fund — actual SYK shares. Positions built over 25 years of this match can be substantial. Other companies (MDT, BDX) have similarly offered employer stock as a plan investment option.
• Sector-wide appreciation — but company-specific variation is enormous. SYK has compounded at over 11% annually for the past 15 years. BSX recovered dramatically from post-2006 lows. But MDT and BDX have underperformed the broader market significantly over the same window, producing weak NUA ratios for most participants.
• High-earning professionals in the top two federal brackets. Many medtech employees — sales directors, regional managers, R&D principals — earn $200K–$400K+. For these employees, the spread between 37% ordinary income and 20% + 3.8% NIIT (23.8% total federal on capital gains) is 13.2 cents per dollar of NUA appreciation. On a $400K NUA position, that difference is $52,800 in lifetime federal tax savings.

Company-by-company NUA potential

Stock prices are approximate as of September 2026. Your plan's lot-level basis — obtained directly from your recordkeeper — determines whether NUA is worth modeling. Ratios shown are for early 2010 contributions; your personal ratio depends entirely on when contributions and employer matches were made to the plan.

Stryker (SYK): the primary NUA case in medical devices

Stryker is among the best NUA situations in the entire S&P 500 for long-tenure employees. Several features combine:

• Employer match directly into SYK stock. Stryker's 401(k) plan invests the company match on the first 4% of employee deferrals into the Stryker Stock Fund — actual SYK shares, not cash or index funds. Employees who have been contributing for 20–30 years have accumulated significant SYK positions through this match channel.
• Exceptional long-term appreciation. SYK traded at approximately $42–$55/share in 2009–2011, $65–$80/share in 2013–2015, and $100–$150/share in 2017–2019. At current prices near $303/share, long-tenure employees who received match contributions during the 2009–2015 window carry ratios of 4:1 to 7:1. That's the kind of spread where NUA produces five- to six-figure lifetime federal savings.
• Fidelity NetBenefits as recordkeeper. Stryker's 401(k) plan is administered through Fidelity, which has strong lot-level cost basis tracking and a well-documented in-kind distribution process (the same process described in our Fidelity NUA guide). Basis retrieval is typically straightforward for long-tenure Stryker employees.
• Michigan headquarters — state-tax neutral. Stryker is headquartered in Kalamazoo, Michigan. Michigan has a flat 4.25% income tax with no preferential rate for long-term capital gains — both OI and LTCG are taxed at 4.25%. This means Michigan residents capture the full federal NUA benefit without state interference in either direction. Employees who have relocated to Texas, Florida, or other no-income-tax states capture that advantage too.

Key planning issue for Stryker employees: verify in-kind distribution is available under your plan. The NUA election requires that employer stock be distributed in-kind — shares transferred to a taxable brokerage account, not liquidated and sent as cash. Most Fidelity-administered 401(k) plans allow this, but the plan document governs. Confirm with your Stryker HR benefits team before initiating any distribution.

Boston Scientific (BSX): a case for early contributors

Boston Scientific's stock history creates a sharp distinction between contribution cohorts:

• 2012–2015 contributors: strong ratios. BSX traded at roughly $8–$14/share during the 2012–2015 period as the company worked through litigation and restructuring. With current prices near $48/share, those early contributions carry 4:1 to 6:1 ratios — the kind of spread where NUA generates meaningful savings.
• Post-2016 contributors: modest ratios. BSX climbed from $20–$25 in 2016–2017 into the $30–$55 range by 2020–2025. Employees whose employer match contributions were made primarily during this later window have ratios of 1.5:1 to 2:1 — marginal for NUA at most tax brackets. The 2:1 breakeven varies by bracket: at 37% OI vs 20% LTCG, you need at least a 2.5:1 ratio for NUA to generate meaningful savings; at 24% OI vs 15% LTCG, breakeven is closer to 3:1.
• Stock price caution. BSX stock has experienced volatility in 2026 due to operational issues. The NUA benefit is calculated based on FMV at the time of distribution, not today's price. If you are planning to execute NUA, model based on current actual FMV, not historical highs — and get your lot-level basis from Fidelity before making any decision.
• Massachusetts state tax. Boston Scientific is headquartered in Marlborough, Massachusetts. Massachusetts taxes long-term capital gains at the same 5% rate as ordinary income — no state-level LTCG preference. Federal-only NUA benefit for MA residents.

Medtronic (MDT): Irish inversion and modest appreciation

Medtronic presents two significant NUA complications:

• Modest appreciation ratios. Medtronic completed its acquisition of Covidien and Irish re-domiciliation in January 2015 with MDT stock trading near $72/share. The stock has underperformed the medical device sector since, trading at approximately $87/share in 2026 — a ratio of roughly 1.2:1 for 2015-era contributors. Even employees who received contributions in 2012–2014 at $35–$55/share carry only 1.6:1 to 2.5:1 ratios at current prices. That's below the breakeven for most brackets.
• Irish domicile — no impact on 401(k) eligibility. Medtronic relocated its legal domicile to Dublin, Ireland through the Covidien inversion. This concerns some employees who worry it affects their 401(k). It does not: Medtronic's U.S. employees still participate in a standard IRC §401(a) qualified plan administered in the U.S., and employer stock in that plan consists of MDT shares traded on NYSE. The NUA rules apply normally. The confusion is understandable given the corporate structure, but the U.S. tax treatment of the 401(k) plan is unaffected.
• Minnesota state tax trap. Medtronic's Minneapolis area operations house the majority of U.S. employees. Minnesota taxes long-term capital gains as ordinary income at rates up to 9.85% — one of the highest in the country. Minnesota employees capture federal-only NUA benefit. With MDT's current ratios already marginal, the absence of any state-level LTCG benefit makes NUA math borderline for most MDT participants.

Bottom line on Medtronic: Unless you have very old contributions (pre-2010 at $30–$40/share basis), NUA is unlikely to be the right election for MDT employees at current prices. Run the full model before dismissing it entirely — but also do not assume NUA makes sense just because you've heard about it from colleagues in other sectors.

Becton Dickinson (BDX): Bard acquisition complications

Becton Dickinson acquired C.R. Bard in December 2017 for approximately $24 billion in a cash-and-stock transaction. Several considerations apply:

• Modest appreciation for BD employees. BDX traded at approximately $140–$160/share in 2015, at acquisition of Bard in late 2017 at roughly $204/share, and is currently in the $195–$210 range. That's a 1.3:1 to 1.4:1 ratio from 2015 contributions — far below what NUA requires to generate meaningful savings. BD employees would need very old contributions (pre-2010 at $50–$80/share) to have ratios in the 2.5:1 to 4:1 range worth pursuing.
• Former Bard employees. If you were a C.R. Bard employee whose 401(k) held Bard stock (BCR) and received BDX shares in the 2017 acquisition, your cost basis in BDX reflects the deal exchange ratio. Bard was acquired at approximately $317/share in cash — so if your plan received BDX shares, the basis assigned was the BDX fair market value at the transaction date (~$204/share). With BDX now at ~$200, former Bard employees carry essentially a flat position — no NUA advantage.
• Alight Solutions as recordkeeper. BD uses Alight Solutions for plan administration. See our Alight NUA guide for the specific portal and call mechanics. Basis data completeness can be a concern for long-tenure employees whose records span pre-Alight legacy systems.
• New Jersey state tax. BD is headquartered in Franklin Lakes, New Jersey. New Jersey taxes long-term capital gains as ordinary income at rates up to 10.75% — the highest in the country alongside California. BD employees in NJ capture federal-only NUA benefit, and given weak appreciation ratios, NUA is rarely the right call for most BD participants.

Intuitive Surgical (ISRG): moderate case, California headwind

Intuitive Surgical has generated significant long-term appreciation, but the picture is nuanced for 401(k) employer stock positions:

• 3-for-1 stock split (October 2017). ISRG did a 3-for-1 stock split on October 3, 2017. Pre-split prices of $450–$550/share became post-split prices of $150–$183/share. Employees who received employer match contributions in ISRG stock before 2017 need to use split-adjusted per-share basis in their NUA calculations. Your Fidelity NetBenefits lot-level report will reflect post-split adjusted basis figures — don't manually adjust what they report.
• Appreciation ratios depend heavily on contribution timing. With ISRG currently near $418/share:
  • 2013 contributions at split-adjusted ~$150/share: 2.8:1 ratio
  • 2015 contributions at split-adjusted ~$170/share: 2.5:1 ratio
  • 2018 contributions at ~$440/share: 0.95:1 ratio (stock went above $1,000 then fell back) — no NUA advantage
  • Pre-2010 contributions at split-adjusted ~$50–$80/share: 5:1 to 8:1 ratio — strong case if any shares remain at this basis
• California state tax. Intuitive Surgical is headquartered in Sunnyvale, California. Most ISRG employees work in California, where long-term capital gains are taxed as ordinary income at rates up to 13.3%. California employees receive federal-only NUA benefit. With ISRG ratios already modest for most contributors (2.5:1 to 3:1), the absence of state-level benefit means NUA is marginal for many Sunnyvale-based employees unless they retired to a no-income-tax state.
• RSU/ESPP clarity. Intuitive Surgical is a major employer of high-earning engineers and surgeons. Many employees receive RSUs and participate in the ESPP. RSUs vest into your taxable brokerage account — they are not employer stock inside a 401(k) and do not qualify for NUA. Only employer stock held inside the 401(k) plan itself can qualify. Do not confuse these two pools of ISRG stock.

DB pension income stacking

Most medical device companies have moved away from defined benefit pensions to defined contribution plans. However, some long-tenure employees — particularly those hired before the late 1990s — may retain DB pension benefits at companies that grandfathered older employees. Stryker does not have a broad DB plan for most employees. Medtronic and BD historically maintained DB pensions for longer-tenured employees.

If you have both a DB pension and 401(k) employer stock, pension income affects the bracket at which your cost basis distribution will be taxed. If your pension plus Social Security already fills the 22% or 24% bracket, your cost basis ordinary income hits those rates — but if the cost basis distribution pushes into 32% or 37%, you may want to execute NUA in a year before SS claiming or before pension income is fully phased in. Run the multi-year projection. See our NUA + Pension guide for the full framework.

State tax table for medical device hub states

Note: "Neutral" states (IN, MI) don't reduce the NUA benefit — they simply don't add a state-level multiplier. The federal benefit applies in full. "Federal-only" states (MN, NJ, CA, MA) mean you pay the same state rate on NUA capital gains as you would on ordinary IRA distributions — but the very large federal savings still apply and make NUA worthwhile for most employees with 4:1+ ratios at those brackets.

Worked example: 29-year Stryker engineer, Michigan

David is 60 years old and has worked as a principal R&D engineer at Stryker in Kalamazoo for 29 years. He's retiring this year. His 401(k) at Fidelity includes a position in the Stryker Stock Fund built up through 29 years of employer match contributions:

David plans to retire in Q1, before Social Security (which he'll claim at 66) and before his first RMD at 73. His retirement-year taxable income — after deductions — will be approximately $95,000, placing him in the 22% federal bracket for most income and in the 15% long-term capital gains bracket.

If David eventually draws down the IRA at a higher bracket — say 24% — or if his heirs inherit at a higher bracket:

• At 24% OI vs 15% LTCG: $364,800 × 9% spread = $32,832 additional federal savings
• At 37% OI vs 23.8% LTCG+NIIT: $364,800 × 13.2% spread = $48,154 additional federal savings

Michigan state tax: at 4.25% flat on both OI and capital gains, the state calculation is neutral — David pays 4.25% either way, so no additional state savings or penalty from NUA.

Additional benefit: By executing the NUA election, David permanently removes $484,800 from the pre-tax IRA balance subject to RMDs. At a 26.5 divisor (age 73, IRS Uniform Lifetime Table), the SYK position alone would have generated ~$18,300/year in forced ordinary income distributions. With NUA executed, David decides when and how much SYK stock to sell — converting forced OI into optional long-term capital gains on his timeline. See our NUA + RMD guide for the full analysis.

When NUA wins for medical device employees

• Stryker employees with 2009–2016 employer match contributions at $42–$120/share. These produce 2.5:1 to 7:1 ratios — the sweet spot for NUA at most tax brackets.
• BSX employees with pre-2016 contributions at $8–$20/share. At 4:1 to 6:1 ratios, NUA generates meaningful savings even if the stock has retraced from highs.
• Any medtech employee planning to retire to Texas, Florida, or Tennessee. If you relocate before executing NUA, you capture the full federal benefit with no state drag — regardless of which company you worked for.
• Employees with large positions and high projected retirement brackets. At 37% OI vs 23.8% LTCG+NIIT, a 4:1 SYK position generates over $50,000 in federal lifetime savings on a $485K position. That ROI on planning time is compelling.
• Employees who want to reduce future RMDs. Removing employer stock from the pre-tax plan reduces the balance subject to RMDs at 73 — permanently converting forced ordinary income into optional capital gains. This benefit exists regardless of current ratio.

When NUA doesn't help

• Medtronic employees with post-2012 contributions. At 1.2:1 to 1.8:1 ratios, the federal savings rarely justify the complexity. Run the model, but don't assume NUA is the right call.
• BD employees with standard contribution timing. BDX has not appreciated strongly enough to produce NUA-worthy ratios for most participants.
• ISRG employees in California with mid-cycle contributions. A 2.5:1 ratio at 13.3% CA capital gains rate (same as OI) leaves only the federal benefit — and that federal spread at a 2.5:1 ratio may not justify the one-shot complexity.
• Any position under 2:1 ratio. Below approximately 2.5:1 ratio (varying by bracket), the tax savings from NUA are typically too small to justify the distribution-year ordinary income spike, the IRMAA exposure, and the planning complexity.
• Plans that don't allow in-kind distribution. If your plan requires liquidation of employer stock before distribution, the NUA election is impossible. This must be confirmed with your plan administrator before you take any action.

Questions to ask your plan administrator

1. Does the plan allow in-kind distribution of employer stock (shares transferred to a taxable account without being liquidated)?
2. Can you provide a lot-level cost basis report for my employer stock positions?
3. Is the employer stock held in a unitized fund or as actual underlying shares?
4. What is the December 31 deadline for completing the lump-sum distribution in a calendar year?
5. What documentation do I need to initiate an NUA in-kind distribution?
6. Is mandatory 20% federal withholding required on the cost basis portion? (Answer: yes, per IRC §3405(c) — plan accordingly.)

See our Fidelity NUA guide (Stryker, BSX, ISRG, MDT) and Alight NUA guide (BD) for the specific call scripts and portal navigation.

1. IRC §402(e)(4) — Net unrealized appreciation rules: law.cornell.edu/uscode/text/26/402
2. IRS Publication 575 (2025), Pension and Annuity Income — NUA treatment and 1099-R Box 6: irs.gov/publications/p575
3. IRS Notice 2002-3 — Lump-sum distribution guidance: irs.gov/pub/irs-drop/n-02-03.pdf
4. IRS Rev. Proc. 2025-32 — 2026 inflation adjustments (LTCG thresholds: 0%/$0–$96,700 single/$0–$193,350 MFJ; 15%/$96,701–$600,050 single; 20%/above): irs.gov/pub/irs-drop/rp-25-32.pdf
5. IRS Topic 559 — Net investment income tax (3.8% NIIT on capital gains above $200K single/$250K MFJ): irs.gov/taxtopics/tc559
6. Values verified as of September 2026 against IRS publications cited above. Stock prices are approximate and change daily; verify current FMV and lot-level cost basis directly from your plan recordkeeper before modeling any NUA election.