During a wide-ranging keynote speech at Pensions & Investments' Global Future of Retirement conference, Michael S. Falk, partner with Focus Consulting Group, said that with the definitions of employer and worker changing, "we need to disconnect our health care and retirement plans from the employer-sponsored model. Employers are not in the health-care business; they aren't in the retirement business."
Mr. Falk noted during the luncheon keynote speech that capital investment, health care and education are three key factors that can change productivity. He also proposed a two-tiered retirement age, lifetime health savings accounts and drastic changes to parts of the American education system.
To stabilize retirement the retirement system in the U.S., Mr. Falk said the retirement age should be 73, with a different level for those in the workforce who have physically demanding jobs or work in hazardous conditions.
While Social Security is doing a good job at providing a safety net, Mr. Falk said it's time for defined benefit plans "to go away" and that with defined contribution plans, "what we have is a coverage problem," not a design or investment problem. Citing the move toward secure choice plans at the state and municipal level, he called the state plans "wonderful" and said if these plans are successful, "there's a chance the feds will follow" and create superannuation plans.
Mr. Falk continued, saying "We can't solve retirement without thinking about health care and education."
Research has found that to have future economic mobility, one must have three key things in one's life from birth to age 6 or 8: a stable household, access to schools and good nutrition. Without those three things, the chance of economic mobility is practically nil.
To meet part of those needs, Mr. Falk suggested making all-day kindergarten mandatory, with breakfast and lunch provided.
In the U.S., "we don't have health care … we have sick care. We need to create incentives for health care; need to connect the user and the provider."
Echoing other conference speakers Tuesday, Mr. Falk told the audience: "If we know there's a problem, it's incumbent upon us to do something about it."