I spent last Friday collaborating with a panel of industry “luminaries” as judges (see http://www.principal.com/theprincipal10best/judges.htm) for Principal’s 10 Best Companies for Financial Security. It’s the third year I have been asked to participate (it’s the fifth year for the program) – and I’m pleased to note that the combination of a bit of experience with the judging process itself, a well-vetted scoring system, and a comprehensive set of background materials compiled by Mathew Greenwald & Associates makes what could be a daunting process manageable.
There’s a lot of science in developing the criteria and weightings – but there’s also what might well be termed “art” that manifested itself in the interaction of the judges (which includes two of the previous winners of the award) as we worked our way toward a list of the 10 best. The criteria – a truly robust list of benefits that run the gamut from insurance to health to retirement – all contribute to individual financial security. What’s not always as certain is the appropriate balance between the “here-and-now” impacts of things like short-term disability coverage and health insurance, and things, such as retirement savings, that are designed to sustain us over the longer term. It was interesting on Friday, as it has been the past two years, to debate and discuss that balance with my colleagues on the panel – not just in esoteric terms, but to see how those combinations are applied in the “real world.”
I was struck this year, as I have been in previous years, by how many small and mid-size employers are now offering benefits packages that would be the envy of many in large corporate America. Companies that not only still offer a well-funded and generous defined benefit plan, but that still pay for retiree medical care (some pay 100%), and that provide health insurance at no cost to employees, as well as a stunning variety of wellness programs, profit-sharing contributions, and carefully constructed incentives. Companies that are not only fiercely committed to attracting and retaining good workers, but also in helping those employees have a safe and secure retirement long after they are drawing a paycheck.
Unfortunately, these companies aren’t the ones garnering headlines, nor is their situation dominant in the minds of those in Washington currently working on pension “reform.” The sad fact is “if it bleeds it leads” – and “reform” (certainly by the time Congress gets involved) generally consists of closing the barn door well after the problem is beyond saving – while inflicting damage on programs that weren’t problems to begin with. More’s the pity, because there are good stories to tell, and they vastly outnumber the current cast of miscreants.
Advisors help these programs become better every day, of course. That reality was borne out in the course of our deliberations Friday. Both of the plan sponsors on the judges’ panel – plan sponsors who were on that panel because they had been named to the 10 Best list in previous years – had taken the time to enter their names for consideration specifically at the urging of financial advisors who worked with their plans. Advisors who not only played an active role in helping deliver those benefits, but whose breadth of experience validated their notions that these programs really were superior – and who went beyond merely doing the job they were paid to do to encourage the sponsors to take the time to share their stories.
That’s good for the employees who benefit from those programs, the plan sponsors who make the commitment to offer them, the rest of us who are inspired by their stories – and ultimately, of course, for the advisors who took the initiative to set all of this in motion.
- Nevin Adams firstname.lastname@example.org
(I can’t disclose the winners of this year’s program – but you can read more about last year’s winners at http://www.plansponsor.com/magazine_type3/?RECORD_ID=31129