Miners’ pensions in jeopardy
United Mine Workers President Cecil Roberts told the U.S. Senate’s Finance Committee Tuesday that the union’s 1974 pension plan, which covers more than 100,000 retirees and their spouses, could be insolvent within the next few years.
Speaking at the committee hearing on problems faced by multi-employer pension plans, Roberts urged committee members to support passage of the Miners Protection Act of 2015 introduced in July.
The legislation, SB 1714, would use excess money in the Abandoned Mine Land Fund to support the pension plan, which now provides pensions to 90,000 pensioners and covers an additional 16,000 active and former miners who will have future pension claims.
The bill also would ensure health care benefits for about 20,000 retired miners and their dependents whose companies have been forced into bankruptcy as a result of the downturn in the coal industry.
“These are real people we are talking about. They live on small pensions, averaging $530 per month, plus Social Security,” Roberts testified.
“They spent decades putting their lives and health on the line every single day, going into coal mines across this nation to provide energy and raw materials needed to make America the most powerful nation on earth.”
Without passage of the legislation, the plan’s actuary projects it will be insolvent by 2026, Roberts said. However, actuary reports by the Pension Benefit Guaranty Corp., show insolvency could come as soon as 2020, he said.
In Pennsylvania, 13,269 pensioners receive benefits under the plan, according to information provided by the union. This includes 1,436 pensioners in Greene County, 1,587 in Washington County and 2,120 in Fayette County.
The bill is backed by U.S. Sen. Bob Casey.
“These men, women and their families deserve the health care and pension benefits they have worked for,” said Casey, D-Pa. “The prospect of reducing these benefits and exposing these miners insecurity after years of service to our country’s energy needs is unjust.”
Problems with the 1974 Pension Plan did not come about because of mismanagement or overly-generous benefits, Roberts said. In 2007, before the recession, the plan was about 93 percent funded with projections showing it heading toward being fully funded in the next decade, he said.
“The financial crisis blew a gaping hole in those projections,” Roberts said. “… With the bankruptcy courts allowing companies to withdraw from the plan, the insolvency looms ever larger and closer.”
The plan now has about $3.8 billion in assets and pays out about $600 million in benefits each year. For every working miner now paying into the plan, 10 draw pension checks.
Steps have been taken to address the plan’s fiances, Roberts said. Contributions rates were increased and the plan was closed to new miners hired after 2012 while still requiring companies to contribute to the plan on their hours.
However, coal company bankruptcies in the last few years have only accelerated the plan’s decline, he said. Two bankrupt companies have already been relieved of pension obligations and have ceased making contributions to the plan.
The downturn in the industry also has meant fewer miners working to contribute to the plan and more miners retiring early leading to greater pension payouts.
Roberts said the legislation also will ensure the federal government and coal operators honor their obligations of lifetime pensions and health benefits to retired miners and their families.
That “promise” was first made in 1946, during negotiations between the union and the federal government, which had seized the nation’s coal mines to resolve long-running strikes, and has been written into union contracts since then, Roberts said.
“The miners lived up to their commitment and the federal government has enacted federal legislation on numerous occasions to live up to its commitments,” he said.
“I’m here today to remind you that we are running out of time. (SB 1714) must be enacted in this Congress if the promise to retired miners is to be kept,” he said.