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The Senate Finance Committee will hold a confirmation hearing Thursday on W. Thomas Reeder Jr., health care counsel at the Internal Revenue Service, who was nominated by President Barack Obama in May to be director of the Pension Benefit Guaranty Corp.
If confirmed by the Senate, Mr. Reeder would succeed Joshua Gotbaum, who left the PBGC in September to take a position at The Brookings Institution in Washington.
Prior to joining the IRS in 2013, Mr. Reeder was senior benefits counsel on the Senate Finance Committee from 2009 to 2013. From 2000 to 2013, Mr. Reeder also held several positions at the U.S. Treasury Department, including benefits tax counsel and deputy benefits tax counsel.
Before joining the Treasury Department, Mr. Reeder was a partner at the Paul Hastings, Janofsky & Walker L.L.P. law firm, since renamed Paul Hastings L.L.P., and an associate at Akin Gump Strauss Hauer & Feld L.L.P.
Mr. Reeder’s hearing comes at a time when the PBGC, which guarantees pension plan participants through two insurance programs, faces major financial issues.
The deficit in the agency’s single-employer insurance program topped $19 billion last year. At the same time, mandatory premiums paid by employers with defined benefit plans, which are a key PBGC revenue source to fund benefits promised to participants in failed plans the agency has taken over, could erode as more employers, following the lead of such corporate giants as Ford Motor Co., General Motors Co. and Verizon Communications Inc., reduce the size of their plans by shifting the liabilities to insurers through the purchase of group annuities or offer participants the option to convert their pension benefits to a cash lump sum.
The deficit in the agency’s multiemployer insurance program is even higher — rising more than fivefold in fiscal 2014 to a record $42.4 billion. Lawmakers, alarmed by that deficit, passed legislation in the closing weeks of the last congressional session that will allow financially troubled multiemployer plans to cut benefits to prevent their collapse.
Forty years after it was created, the future of the federal agency that guarantees employees' and retirees' pension benefits is in doubt.