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The 2015 Pension 40: W. Thomas Reeder Jr.

No. 35 W. Thomas Reeder Jr., Director / Pension Benefit Guaranty Corp.

By Tyler Davies

December 22, 2015

< The 2015 Pension 40: The Long Climb

W. Thomas Reeder Jr.

Director / Pension Benefit Guaranty Corp.

Last year’s rank: Not ranked

As the newly confirmed director of the Pension Benefit Guaranty Corp., W. Thomas Reeder Jr. is expected to strike a less strident tone than his predecessor Joshua Gotbaum (No. 15). Reeder, age 65, is a University of Texas School of Law graduate who has made a long trek through government. He was the benefits tax counsel in the office of tax policy in President George W. Bush’s Treasury Department, then moved to a staff job on the Senate Finance Committee and to the Internal Revenue Service under President Obama. Reeder’s ability to work both sides of the aisle helped him gain approval from a bitterly divided Congress. With the Obama administration heading into its final year, Reeder has several important jobs. First, he needs to shepherd implementation of the Kline-Miller Multiemployer Pension Reform Act of 2014. Criticism of the legislation, however, has focused on the sorry state of the PBGC’s own balance sheet — and this leads to job No. 2. In its November 2015 annual report, released a month after Reeder’s confirmation, the PBGC reported an increase in the deficit of its single-employer program to $24.1 billion from $19.3 billion; for multiemployer plans the shortfall rose to $52.3 billion from $42.4 billion. The size of the multiemployer gap caused Moody’s Investors Service to issue a note warning, “Despite current and potential future premium increases, there will come an inflection point where plan sponsors will not be able to afford premiums and the PBGC will run out of money.” The PBGC, Moody’s said, “estimates there is a greater than 50 percent chance it will be insolvent by 2025. It further extrapolates a 90 percent chance of insolvency by 2031. In 2016, Reeder must present these uncomfortable facts to Congress and ask for an increase in PBGC premiums.

The 2015 Pension 40