This week we’ve had several questions regarding “What does the outcome of the election mean for health care or our pension?” The reality is with either candidate no one has the proverbial crystal ball to know for certain nor does a week as President-Elect give a clear signal as to the economic outcomes of a presidency.
Here is what we know to date regarding health care:
- “Repeal and replace” of the Affordable Care Act – most of the bills advanced to date, including those that were pending prior to the election, repeal the mandate. The bills so far have left intact two widely popular components – the elimination of pre-existing conditions and allowing a child to remain on their parents’ insurance through age 25 (up to age 26).
- President-Elect Trump has stated his intention to deregulate the health insurance industry allowing companies to sell across state lines.
- Current proposals include tax relief for health care premiums reimbursed by an employer through a product called a Health Reimbursement Account (HRA) available to employees of small businesses (50 or fewer). The HRA concept cleared the Senate Finance Committee prior to the election. We do not know if the HRA premium arrangement will be enacted by Congress.
- If the Affordable Care Act (ACA) is repealed, it will take time to untangle the system.
- Repealing ACA does not change the financial vulnerability of Churchwide Healthcare.
Here is what we know regarding your retirement account:
- Pension Fund is a conservative, long-term investor. We have diversified investments and a disciplined investment approach that has served our members well in a variety of economic environments. Our investment approach does not change based on which party is elected. We do not “chase” sectors, trying to time the market. We do not invest with our emotions. Your pension is as solid on 11/11/16 as it was on 11/8/16.
- There are indications that certain sectors such as banking, health care and biotech will fare well in the near term.
- Treasury bond yields advanced as the market anticipates an increase in government borrowing to fund tax cuts and infrastructure improvements.
In all cases, we continue to work with our advisors and counterparts through the Church Alliance and Church Benefits Association on these matters. We’ll continue to update you as we become aware of new developments. Our role at Pension Fund remains as the non-anxious presence of the church, assuming the burden of market risk, as we seek to provide our clergy and lay employees with a Strong. Smart. and Secure. retirement.
Todd A. Adams