Health Care Savings Can Improve Retirement System
"A new approach, combining the best of traditional pensions and new savings vehicles," which include health care savings, is required, as "global competition and rapid technological change challenge even the greatest companies to make good on future commitments," Roger Ferguson, president and CEO of TIAA-CREF and a member of the Transition Economic Advisory Board assembled by President-elect Barack Obama, writes in a Wall Street Journal opinion piece.
Among other proposals, Ferguson cites the need to encourage health care savings. "Few private-sector employers offer workers an account to save" for out-of-pocket health care costs for retirees, he writes, adding, "Last year's agreement among the Big Three automakers and the United Auto Workers to establish tax-free trusts for worker health is an approach gaining favor among academic institutions." According to Ferguson, "Congress needs to enable people with these accounts to leave any unused balance to heirs" to "encourage people to hold on to their savings until the last years of their lives, when health care money is most needed."
Such a proposal, taken in combination with others, "offer[s] a way to convert ... into a stronger retirement system," Ferguson writes, adding, "All are achievable, provided that policymakers, public officials and companies seize the opportunity this crisis presents to help ensure that workers will have the retirement savings they'll need" (Ferguson, Wall Street Journal, 11/13).
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