Health Care Reform Could Prompt Earlier Retirement

Provisions of the Patient Protection and Affordable Care Act (PPACA) could cause employees to retire earlier because of health care coverage available after leaving their companies.

 

Many employees have accumulated enough wealth to stop working but do not have adequate health care savings for retirement, Brad Kimler, executive vice president of benefits counseling at Fidelity, said during a Fidelity webinar hosted by PLANSPONSOR.

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The legislation could particularly benefit employees ages 55 to 64 who may be contemplating retirement but are not yet eligible for Medicare, Mike Thompson, principal of human resource services at PwC, told PLANSPONSOR. In addition, this age group may have previously had trouble finding coverage because of pre-existing conditions, he said.

With health care coverage made easier, employers may need to provide alternative incentives—such as phased retirement—to keep their staff, said Arthur Noonan, senior retirement consultant at Mercer. Companies may not want employees to retire earlier if knowledgeable staff will be lost, he said.

On the other hand, some employers may be delighted about the PPACA because it gives employees more confidence that they can afford health care during retirement, Noonan said. It also could save companies money if the reform prompts them to stop offering retiree medical benefits. Companies providing retiree medical could still provide employees with an allowance but direct them to the exchanges, he said.

“In general, employers are still trying to figure out how to afford health care,” Thompson said. “This could provide an easier way to save.”

 

Janus Institutional Adds to Team

Janus Capital Group Inc. announced two institutional appointments to strengthen its institutional client and consultant relationships in the U.S.

Hillary Bolton has been appointed head of consultant relations for Janus Institutional. Tamara Doi joins the firm as a client executive for U.S. Institutional for the Western Region. Both will report to Susan Oh, head of the Janus’ U.S. Institutional Group.  

Bolton has more than ten years of experience in the investment consulting business working with clients in the defined contribution, defined benefit, nuclear decommissioning trusts and endowment segments. Bolton most recently headed Towers Watson’s southeast office. Prior to joining Janus, she was co-head of the defined contribution research committee in the U.S. and a member of the Global Defined Contribution team at Towers Watson. During her eight years at Towers Watson, Bolton participated on the research committees for US Large Cap Equity & Global Fixed Income.  

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Doi most recently served as director of business development for institutions and consultants for Lee Munder Capital Group and was senior vice president in institutional sales at Neuberger Berman.

 

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