We have now turned the corner on a new year, and I thought it would be interesting to take a look at a few things we can hope for in 2012, both for retirement plans and health & welfare programs.
In the retirement plan world, I hope that we can start to feel that we are back to “normal” again as far as the investment markets are concerned. This “new normal” that we have been operating in for the past few years is, quite frankly, terrifying. “Normal” to me simply means investment markets that people can have faith in, not an environment where people are constantly worrying if the other shoe is about to drop. (I’m not even sure there’s a shoe left! 2008 and 2009 certainly had more shoes drop than I own.)
I don’t think it’s a stretch to hope for some level of certainty with the financial markets. We never truly had certainty in the markets, but at least people had a belief that over the long-term, following sound investment principles would lead to positive returns. The volatility we see as part of our current “new normal” doesn’t instill confidence in anyone.
In the past, you believed that if you invested in solid companies you normally would see positive returns. If you diversified your funds appropriately, you would be mitigating some level of risk. If you saved, compounding would help you build up a nest egg and your funds would grow faster than the ravages of inflation could eat it away. Most people I speak to today indicate that their participants have real doubts that these principles hold in today’s world. That’s a real problem.
I can tell you, I never thought I’d open a conference the way I did at the Mid-Sized Retirement and Pension Plan Management Conference in Chicago last October. It went something like this: “Headlines today indicate that our markets are expected to be extremely volatile waiting for a vote from about the European debt restructuring.” Nothing at all against Slovakia, but how can we expect our participants to have confidence in the investments we make available to them if they are constantly hearing things such as this and seeing its impact on our markets? Participants are very tuned into the news media, and see headlines constantly that they can’t fathom. If they feel that situations are beyond their control, very often they retrench. This can be catastrophic for long-term savings.
I’d love to see 2012 as a period where the “old normal” returned, and our participants can have confidence in their ability to save for retirement through the programs that we all work so hard to bring them.
On the healthcare side, my hope is much simpler. I hope we see some clarification on our laws. I’m not staking out a position on one side or the other of the healthcare reform debate here in this blog. As plan sponsors, we want to know what the laws are going to be that govern our plans! If PPACA stays, fine, we will be able to move forward with all its provisions. If PPACA falls, or is partially overturned, fine, we will move forward with those implications. But not knowing what the law will be—we can’t keep going on like that! Let’s get this all decided and move on.
As I’ve said in our conferences many times, most of what we have to do as plan sponsors is the same regardless of what happens with PPACA. Unless your company plans to get out of employer sponsored healthcare entirely, the fundamental issues we face remain the same. We need to continue to focus on: drivers of healthcare costs that we can have some influence over, primarily the health of our participants; proper use of the healthcare system and compliance with medical protocol; and make sure that the plans we have in place are being utilized as intended. These are the areas that can have a profound impact on the total healthcare spend for a company, and remain exactly the same with or without PPACA. There is absolutely no reason to wait and see what happens with the law to start looking at how each of these areas could affect your plan. Putting it more bluntly, holding off on decisions that could help optimize your healthcare plan in order to see what ultimately happens with PPACA is a mistake.
A final note. The “offseason” between the last conference we host one year and the first conference of the following year always feels like an eternity for me. We are in that period right now. This offseason has certainly not been one where we’ve been sitting idle. As you probably know, we’ve restructured our conference format for 2012 to incorporate both healthcare and retirement plans into a single program. Ever since we began offering educational conferences more than 20 years ago, we’ve always tried to listen to our participants and bring them programs that are tuned to their needs. Our new format is based on overwhelming response we’ve had from people.
Fortunately, modern technology has given us the ability to stay in touch between programs via means such as this blog. Now that the year has turned, I plan to have an entry at least every other week. If there are developments in either the healthcare world or the retirement industry, I’ll get my thoughts out to you as soon as events occur. We’re also looking at other ways that we can expand our social media presence, maybe even figuring out how I can use the Twitter handle I’ve set up for myself.
Although March 18, when our San Francisco Retirement and Healthcare Plan Management program opens is only a couple of months away, we can’t wait. See you soon…and until then, keep in touch!
Please feel free to add your comments, as well as hopes for the new year.