By Kenneth Quinnell Miners Working with Congress to Solve Pension Crisis
Strong bipartisan legislation has been introduced in recent congressional sessions to solve the pension crisis currently facing America’s mine workers. The Miners Protection Act is a response to a growing insolvency problem with the Mine Workers (UMWA) 1974 Pension Plan. The legislation would protect the pensions of 87,000 current beneficiaries and 20,000 more who have vested for their pensions but have not yet begun drawing them. We’ve waited too long to see this problem addressed, and Congress should act now.
The pension fund for America’s mine workers began as a promise from President Harry Truman in 1946 that America would protect the health and welfare of coal miners, who were vital to the country’s safety and growth. In 1974, changes were made to the plan to strengthen these protections. But in recent years, a combination of extremely depressed coal markets, coal company bankruptcies and other factors have caused a significant dropoff in the employer contributions to the fund. In the past two years, contributions to the plan have fallen by more than $100 million, setting up significant problems in the near future, with the fund currently projected to go bankrupt in 2022 or 2023.
Specifically, the legislation would:
- Include a provision from the original Miners Protection Act allowing transfers of excess funds in the Abandoned Mine Land program to the 1974 UMWA Pension Plan.
- Direct the Treasury Department to loan the 1974 UMWA Plan funds annually to prevent insolvency.
- Cap the annual loan amount at $600 million and set the interest rate at 1%.
- Require the fund to pay interest only for the first 10 years and then pay back the principal plus interest over a 30-year term.
- Require the fund to certify each year that the pension plan is solvent and able to pay back the remaining principal and interest.
- Actuarial analyses indicate that the UMWA 1974 Plan would need to take loans for as little as four years.
Learn more about the legislation.
Wed, 10/04/2017 – 12:37