It has been reported by the WSJ that Murray Energy’s bankruptcy filing removes from the Coal Miners Pension system the last major contributor. This action places in jeopardy the retirement benefits for roughly 90,000 former and current workers and their families, while also potentially impacting healthcare benefits for many, as well. The urgency for Congress to address the ever-growing retirement crisis within the multiemployer space is palpable.
There are many factors contributing to the demise of the Coal Miners pension, now estimated to be at only 38% funded, but the fact that at least eight coal companies have filed for bankruptcy protection since last October means that the plan is receiving contributions (roughly $30 million in 2018) that are being dwarfed by benefit payments estimated at greater than $600 million.
There is no way that this plan, or any plan with a similar asset to liability ratio, could earn enough to ever meet all of the plan’s future obligations. The only way to “save” this plan is through an injection of funds as a lifeline or through benefit cuts that would obviously be tragic for those workers and their families that were promised the benefits if they risked their lives on a daily basis.
The Coal Miners plan was forecast to run out of money in 2022, and it was one of three plans examined by the Cheiron actuarial firm that was going to need additional assistance beyond the loan proceeds from the Butch Lewis Act (H.R. 397) to meet all of its obligations. It appears now that 2022 may be wishful thinking if the last of the major contributors can no longer meet its obligation. The demise of these companies and the subsequent bankruptcy filings also means that withdrawal liability is not being paid that would have at least supported the current funded status.
Is Congress willing to see these hard-working Americans lose most of their promised benefit? There is legislation before the Senate that could help. Action is needed before this plan, and others, suffer a total collapse. The damage to many local economies will also take a toll on small businesses and employment in those communities.