Senators Question Trump’s Nomination for PBGC Director in Midst of Multiemployer Plan Crisis
Reeder, who is in the middle of his five-year term, has been advocating for changes to help the PBGC’s programs, but the president has nominated Gordon Hartogensis—who, the senators say, seems to have little to no prior experience relevant to the pension system and the work of the PBGC—to replace Reeder.
Senator Patty Murray (D-Washington), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Senator Ron Wyden (D-Oregon), ranking member of the Senate Finance Committee, sent a letter to President Donald Trump demanding an explanation of his sudden decision to replace Tom Reeder as Director of the Pension Benefit Guaranty Corporation (PBGC).
The president has nominated Gordon Hartogensis—who, the senators say, seems to have little to no prior experience relevant to the pension system and the work of the PBGC—to replace Reeder.
Meanwhile Reeder, who is in the middle of his five-year term, has been advocating for changes to help the PBGC’s programs, especially the program for multiemployer defined benefit (DB) plans. In testimony during a hearing of the Joint Select Committee on Solvency of Multiemployer Pension Plans, Reeder noted that the PBGC’s multiemployer insurance program is projected to become insolvent in 2025.
He noted that insolvency of the multiemployer program will dramatically reduce the already relatively low guarantee for multiemployer plan participants. Currently, the only money available to provide financial assistance for benefit payments will be incoming multiemployer premiums, and the program will soon be spending more in financial assistance than it receives in premium income.
According to Reeder, funds in the multiemployer program will represent only a small fraction of the amount required for current guarantee levels. PBGC would submit to Congress, in advance of multiemployer program insolvency, a schedule of reduced basic-benefit guarantees which would be necessary in the absence of a premium increase. “Such reduced guarantees would result in participants in failed multiemployer plans receiving a very small fraction—an eighth or less, on average—of the current guarantee level, no matter when their plan became insolvent.”
Reeder also stressed that the multiemployer guarantee has not increased since 2001 and is not indexed for inflation. The maximum guaranteed benefit for a retiree with 30 years of service is $12,870 annually, while the maximum guaranteed benefit for a retiree in a single-employer plan is $65,045 annually. The single-employer guarantee is indexed for inflation.
Reeder says legislation is needed to address the looming insolvency of PBGC’s multiemployer program. A number of proposals have been put forward; however, Reeder says additional actions may be necessary to address all the problems facing the broader multiemployer plan system.
In their letter, the senators wrote, “In light of your Administration’s pattern of politically motivated and ethically questionable personnel decisions, the decision to replace Mr. Reeder, who has decades of experience working on pensions and other employee benefit issues, raises serious concerns. We are troubled by this unexpected and seemingly unnecessary change in the agency’s leadership, particularly as the country faces a multiemployer pension crisis.”
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Transamerica Expands Distribution Team; Alliance Aims to Extend Expertise in HR Industry; Procyon Partners Appoints Experienced Adviser to Portfolio Manager Position; and more.
Transamerica announced that industry veterans Bryan Hissong and Ryan Waller joined Transamerica’s distribution team as regional vice presidents for retirement plans, and Ben Standish has taken over the large-market distribution territory for many Western states.
Bryan Hissong will support financial advisers working with large-market retirement plans and will cover the territory of Arkansas, Kansas, Louisiana, Missouri, Nebraska, Oklahoma and Texas. He has more than two decades of experience in retirement plans and pensions. Hissong holds a bachelor of science degree from Kansas State University. He will report to Michael Wannell, Transamerica division sales manager for distribution.
Waller will work with financial advisers on mid-market retirement plans, and will cover southeastern Texas, including the greater Houston and Corpus Christi areas. He has over 19 years working directly with retirement plans. Waller is a graduate of Coe College, with bachelor of science degrees in economics and business administration. He will report to Tom Briggs, Transamerica division sales manager for distribution.
Standish, a Transamerica retirement plan sales veteran, has taken over responsibility for large-market retirement plans in many Western states. Standish will work with financial advisers on large-market retirement plans and will Northern California, Colorado, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, and Wyoming. He has worked with Transamerica retirement plans distribution since 2009. Standish is an accredited retirement plan consultant through the Society of Pension Actuaries and Recordkeepers and is an accredited investment fiduciary administered through the Center for Fiduciary Studies. He is a graduate of California State University at Chico, with a bachelor of science degree in business finance. Standish will report to Wannell.
“As Transamerica’s momentum continues to grow, we seek to recruit and promote the best wholesalers in the industry to support the financial advisor community, third party administrators, and other intermediaries,” says Joe Boan, SVP, executive director, Workplace and Individual Market Distribution. “With Bryan Ryan and Ben, and their long tenure in retirement plans, I am confident they will be valuable resources to financial advisers and their retirement plan clients.”
Certified Pension Professional Joins Transamerica’s Client Management Department
Transamerica announced that Nate Sherman joined its western region client management team, focusing on serving large-market retirement plan clients. Sherman will be a client executive and will report to Heather Cheda, regional director, Workplace Solutions.
Sherman has worked in the retirement plan industry for more than two decades, focused mostly on consultative and managerial roles. He is a certified pension consultant and qualified pension administrator through the American Society of Pension Professionals & Actuaries. He is also a member of the Western Pension & Benefits Conference. Sherman has a bachelor’s degree in economics from Rutgers University. He will be based in Portland, Oregon.
“Transamerica is dedicated to finding the best and brightest professionals that can bring a wide range of expertise to our retirement plan clients,” says Scott Ramey,senior vice president and head of Workplace Solutions for Transamerica. “Nate Sherman brings a wealth of knowledge and experience, and I am very pleased he joined our Client Management team. I have every confidence our retirement plan sponsor clients will benefit from his expertise.”
Alliance Aims to Extend Expertise in HR Industry
IA Solutions Group, a strategic alliance offered byInnovo Benefits GroupandAegis Retirement Partners, haslaunched to give human resources (HR) and business leaders better solutions in an increasingly complex industry.
IA Solutions Group will address a gap in the market for clients. The new venture hopes to disrupt industry trends by enlarging coverage of the value proposition that has been at the heart of each firm’s success in their respective fields—pairing deep expertise with personalized service to yield innovative solutions that drive competitive advantage.
Without merging, thought leaders at both firms will join forces to serve clients who require a broader range of services. Aegis Retirement Partners and Innovo Benefits Group will continue to operate independently in their respective areas of expertise.
BlueBay Hires Addition to Developed Markets Team
Global specialist fixed income manager BlueBay Asset Management LLP (BlueBay) appointed Stephen Thariyan to the newly created role of co-head of Developed Markets.
Based in London and reporting to Raphael Robelin, chief investment officer, Thariyan will work alongside Mark Dowding, co-head of Developed Markets, and will assume responsibility for the Developed Markets’ corporate credit investment process and help develop and grow BlueBay’s corporate credit strategies across investment grade, leveraged finance and convertible bonds.
Thariyan has over 25 years’ experience as a credit investor, most recently at Henderson Global Investors where he was global head of Credit for the last ten years. Prior to this he spent eight years as a senior portfolio manager at Rogge Global Partners and has also held roles at Natwest Markets and Chevron Corporation.
Procyon Partners Appoints Experienced Adviser to Portfolio Manager Position
Procyon Partners has hired Antonio Rodrigues, past senior portfolio manager for Olson Mobeck Investment Advisors and People’s United Advisors, for a continuing role as senior portfolio manager.
Based in Shelton, Connectivut, Procyon Partners is an independent registered investment advisor (RIA) with a dual focus on institutional consulting and personal wealth management. Procyon Partners is also a member of the Dynasty Financial Partners Network.
Rodrigues has 20 years of professional experience working in the financial markets on behalf of individuals and families, corporations and non-profit organizations. As a senior portfolio manager for Olson Mobeck Investment Advisors and People’s United Advisors, he was a senior member of the investment committee. He led the efforts on the development, formalization and implementation of a covered option writing strategy, implementation of alternative investments as an asset class, as well as overall asset allocation while at the firm.
Prior to Olson Mobeck, he was a financial adviser, trader and investment associate at People’s Securities Inc.
Rodrigues graduated with a Bachelor of Science from Fairfield University as well as a Masters in Finance from Fairfield University’s Charles F. Dolan School of Business.
VP of Retirement Services Joins USI Consulting
USI Consulting Group confirmed that Michael Pegg has joined the company as vice president of retirement services, based in Philadelphia, Pennsylvania.
Pegg will be helping plan sponsor clients meet their fiduciary responsibilities while helping their participants achieve retirement security. He has over 10 years of experience in the retirement and investment services industry, and assisted plan sponsors in making informed choices through educated and well-developed retirement programs. Pegg also has experience with the design, implementation and servicing of defined contribution (DC) and defined benefit (DB) retirement plans with corporations and non-profits.