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  #861  
Old 01-10-2020, 07:40 AM
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BENEFIT CUTS

https://www.pionline.com/pension-fun...its-under-mpra
Quote:
Musicians pension fund seeks to cut benefits under MPRA

Spoiler:
American Federation of Musicians and Employers' Pension Fund, New York, applied to reduce benefits to prevent insolvency, spokesman James Chase confirmed in an email.

The board filed its application with the U.S. Treasury Department on Dec. 30 to reduce benefits under the Multiemployer Pension Reform Act of 2014.

"Although reducing benefits will be painful, the trustees are seeking permission to do so because running out of money would mean a much greater benefit loss in the future," a notice on the pension fund's website said.

The pension fund's actuaries advised the board in May that the fund had entered "critical and declining" status for its fiscal year that began April 1 and is projected to be insolvent within 20 years.

The pension fund had $1.8 billion in assets and about $3 billion in liabilities as of March 31, with a funding shortfall of $1.2 billion and a funding ratio of 60%. For the fiscal year ended March 31, the plan paid out $185 million in benefits but received only about $76 million in contributions.

"This negative cash flow is projected to continue — and worsen," said an FAQ page on the website.

If the proposed reductions are approved, about 53% of participants would see no reduction in benefits, while 45% would have their benefits reduced up to 19%. Less than 2% of participants would have their benefits reduced 20% to 40%.

Participants 75 to 80 years old are partially protected, using a sliding scale based on how close the participant is to age 80. Benefits won't be reduced for participants who are 80 years old or older.

If approved, the benefit reductions would go into effect Jan. 1, 2021.


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  #862  
Old 01-13-2020, 09:41 AM
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https://www.plansponsor.com/assumpti...paign=Newsdash

Quote:
Assumptions for Withdrawal Liability Cannot Be Changed and Applied Retroactively
“The selection of an interest rate assumption after the Measurement Date would create significant opportunity for manipulation and bias” by multiemployer plan trustees, a federal appellate court stated.


Spoiler:
The 2nd U.S. Circuit Court of Appeals has vacated a lower court’s ruling that allowed for the change of the interest rate assumption used for calculating Metz Culinary Management, Inc.’s withdrawal liability for exiting The National Retirement Fund.

According to the court opinion, Buck Consultants utilized a 7.25% interest rate assumption to determine the retirement fund’s unfunded, vested benefits (UVBs). In October 2013, the multiemployer plan replaced Buck with Horizon Actuarial Services, LLC beginning in 2014. The plan’s 2013 Form 5500 Schedule MB, states that a 7.25% interest rate assumption remained in place in 2013 for purposes of determining UVBs. At a 7.25% interest rate, appellant’s withdrawal liability would have been $254,644

In June 2014, however, Horizon informed the plan’s trustees that the interest rate assumption for purposes of withdrawal liability was reduced from 7.25% to approximately 3.25%. At a 3.25% interest rate, appellant’s withdrawal liability was calculated to be $997,734.

The court first determined that because Metz’s withdrew from the plan on May 16, 2014, the applicable Measurement Date is December 31, 2013, per the Employee Retirement Income Security Act (ERISA).

The plan’s assertion that its actuary had not made any interest rate assumption determination as of December 31, 2013, for purposes of calculating the fund’s UVBs for withdrawal liability was rejected by the appellate court. And the court said that the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) requires that the assumptions and methods in effect on December 31, 2013, be used for calculating the employer’s withdrawal liability. Absent some change by the fund actuaries, the existing assumptions and methods remained in place as of December 31, 2013.

On May 4, 2016, Metz sought enforcement of the final award determined by an arbitrator. On March 27, 2017, the district court vacated the final award, holding that “ERISA does not require actuaries to make withdrawal liability assumptions by the Measurement Date.” According to the district court, “the withdrawal liability interest rate assumption in effect on the Measurement Date is not applicable to the upcoming plan year unless the actuary affirmatively determines that the assumption . . . is reasonable and her best estimate of anticipated experience under the plan as of the Measurement Date.”

The 2nd Circuit said factual findings made by an arbitrator enjoy a “presumption of correctness” under ERISA Section 4221(c). The arbitrator stated that the fund’s “decision to apply a changed assumption [rate] retroactively so as to increase the withdrawal liability assessed to [Metz] and other employers who withdrew from the fund after December 31, 2013, was violative of MPPAA.”

The appellate court stated that in the context of multiemployer pension plans, interest rate assumptions cannot be altered daily and must have a degree of stability. Nor, in that context, do interest rate assumptions remain open forever and subject to retroactive changes in later years. In addition, the court said, “certain provisions of ERISA allow employers to request and receive notice of their estimated withdrawal liability prior to actually withdrawing from a fund… Such provisions are of no value if retroactive changes in interest rates assumptions may be made at any time.”

In considering the retroactive selection of interest rate assumptions, the 2nd Circuit concluded that the assumptions and methods used to calculate the interest rate assumption for purposes of withdrawal liability must be those in effect as of the Measurement Date, and absent a change by a fund’s actuary before the Measurement Date, the existing assumptions and methods remain in effect. “Were it otherwise, the selection of an interest rate assumption after the Measurement Date would create significant opportunity for manipulation and bias. Nothing would prevent trustees from attempting to pressure actuaries to assess greater withdrawal liability on recently withdrawn employers than would have been the case if the prior assumptions and methods actually in place on the Measurement Date were used,” the appellate court concluded.

In addition to vacating the judgment of the district court, the 2nd Circuit remanded the case to the district court with directions to enter judgment for the appellant and to remand any remaining issues to the arbitrator.


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  #863  
Old 01-15-2020, 03:23 PM
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https://burypensions.wordpress.com/2...er-under-mpra/

Quote:
Breaking News: First Facilitated Merger Under MPRA
Spoiler:
The Pension Benefit Guaranty Corporation (PBGC) today announced its first approved facilitated merger under the Multiemployer Pension Reform Act of 2014 (MPRA). Under this authority, PBGC may provide financial assistance to help merge two multiemployer plans in order to extend the solvency of a financially distressed plan. To help facilitate the merger of the Laborers International Union of North America 1000 Pension Fund (Local 1000 Plan) with the Laborers Local 235 Pension Fund (Local 235 Plan), PBGC will provide three annual installments of $8.9 million to the merged plan beginning this month.

Per the PBGC Q&A:

The merger will help to protect the pension benefits of over 400 participants of the Laborers International Union of North America Local 1000 Pension Fund. Without the merger, the Local 1000 Plan was projected to become insolvent in 2026. The merger will not affect participants and beneficiaries of the Laborers Local 235 Pension Fund.

From their latest 5500 filings:


Plan Name: Laborers International Union of North America 1000 Pension Fund
EIN/PN: 14-6016586/001
Total participants @ 6/30/18: 484 including:
Retirees: 297
Separated but entitled to benefits: 84
Still working: 103

Asset Value (Market) @ 7/1/17: $14,704,568
Value of liabilities using RPA rate (3.04%) @ 7/1/17: $77,346,478 including:
Retirees: $34,563,374
Separated but entitled to benefits: $12,705,284
Still working: $30,077,820

Funded ratio: 19.01%
Unfunded Liabilities as of 7/1/17: $62,641,910

Asset Value (Market) as of 6/30/18: $13,726,738
Contributions(MB): $1,402,145
Contributions(H): $1,486,905
Payouts: $3,125,463
Expenses: $386,520

——————————————————————————————————————————–

Plan Name: Laborers Local 235 Pension Fund
EIN/PN: 13-6186984/001
Total participants @ 12/31/18: 1,159 including:
Retirees: 657
Separated but entitled to benefits: 212
Still working: 290

Asset Value (Market) @ 1/1/18: $56,202,293
Value of liabilities using RPA rate (2.98%) @ 1/1/18: $114,305,422 including:
Retirees: $67,942,145
Separated but entitled to benefits: $14,550,216
Still working: $31,813,061

Funded ratio: 49.17%
Unfunded Liabilities as of 1/1/18: $58,103,129

Asset Value (Market) as of 12/31/18: $51,627,578
Contributions: $5,070,184
Payouts: $5,938,671
Expenses: $733,228


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  #864  
Old 01-16-2020, 05:13 PM
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https://burypensions.wordpress.com/2...yers-7-refile/
Quote:
Bricklayers 7 Refile
Spoiler:
Perhaps this means no bailout for multiemployer plans as we are starting to see filings under MPRA for benefit cuts picking up.

The American Federation of Musicians and Employers’ Pension Fund and Subsidiary out of New York, NY announced a filing this week and today the MPRA website showed that the Bricklayers and Allied Craftsmen Local No. 7 Pension Plan out of Austintown, OH (which was the sixth plan to file and then withdrew their application) refiled at a time when, according to their latest 5500 filing, they might have $8 million left in the fund and negative cash flow of $2.5 million.


Plan Name: Bricklayers and Allied Craftsmen Local 7 Pension
EIN/PN: 34-6666798/001
Total participants @ 4/30/18: 429 including:
Retirees: 225
Separated but entitled to benefits: 105
Still working: 99
Asset Value (Market) @ 5/1/17: 12,893,823
Value of liabilities using RPA rate (3.05%) @ 5/1/17: $63,462,334 including:
Retirees: $34,232,890
Separated but entitled to benefits: $16,432,666
Still working: $12,796,978

Funded ratio: 20.32%
Unfunded Liabilities as of 5/1/17: $50,568,511
Asset Value (Market) as of 4/30/18: $11,528,839
Contributions: $749,475
Payouts: $3,012,873
Expenses: $161,681


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  #865  
Old 01-16-2020, 10:45 PM
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https://burypensions.wordpress.com/2...sicians-chops/

Quote:

Musicians Chops
Spoiler:
When the American Federation of Musicians and Employers’ Pension Fund out of New York, NY cuts benefits under MPRA effective as of January 1, 2021 we may finally see some pushback from a constituency with a megaphone.

The filing is not yet on the MPRA website but the 5500 for the year ended March 31, 2019 was submitted today and here is data from that filing:


Plan Name: American Federation of Musicians and Employers’ Pension Fund and Subsidiary

EIN/PN: 51-6120204/001

Total participants @ 3/31/19: 50,135 including:

Retirees: 16,069
Separated but entitled to benefits: 13,754
Still working: 20,316
Asset Value (Market) @ 4/1/18: 1,876,609,576

Value of liabilities using RPA rate (2.98%) @ 4/1/18: $5,204,629,080 including:

Retirees: $2,283,396,311
Separated but entitled to benefits: $718,144,272
Still working: $2,203,088,497
Funded ratio: 36.06%

Unfunded Liabilities as of 4/1/18: $3,328,019,504

Asset Value (Market) as of 3/31/19: $1,803,484,119

Contributions (MB): $76,256,722

Contributions (H): $72,805,923

Payouts: $185,211,329

Expenses: $31,365,527
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  #866  
Old 01-17-2020, 07:18 AM
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https://www.plansponsor.com/union-pe...rs-new-decade/

Quote:
Union Pension Funding Crisis Enters a New Decade
The latest appeal for union pension benefit reductions could result in more than 20,000 musicians, mainly younger ones, seeing reductions ranging from 2% to more than 50% in their monthly benefits.


Spoiler:
In new commentary shared with PLANSPONSOR, Israel Goldowitz, partner with the Wagner Law Group, says the financial hardship faced by the American Federation of Musicians and Employers’ Pension Fund is characteristic of a broader problem.

As Goldowitz explains, the U.S. Treasury Department has received an application from the American Federation of Musicians and Employers’ Pension Fund to suspend benefits, based on authorities granted under the Multiemployer Pension Reform Act of 2014. The plan’s suspension application is the latest of more than 30 by similar union-run multiemployer plans.

So far, Goldowitz says, the applications have mainly covered workers in transportation and the building trades. But upwards of 120 plans in a number of industries are considered “critical and declining,” he says, which means they are expected to run out of money within 20 years. Such plans, under the 2014 funding reforms, may suspend benefits if that would prevent outright insolvency.

Goldowitz cites news reports stating that more than 20,000 musicians, mainly younger ones, could see benefit reductions ranging from 2% to more than 50% in their monthly benefits. In cases like this, the Treasury must approve or deny the benefit reduction plan after conferring with the U.S. Department of Labor and the Pension Benefit Guaranty Corporation (PBGC)—for which Goldowitz once served as chief counsel. Once approved, the suspension proposal goes to the plan’s participants and beneficiaries for a vote.

While it might seem unlikely that pension beneficiaries would vote in favor of benefit cuts, in fact this has already happened across the U.S. Votes in favor of benefit reductions are cast based on a simple economic analysis: The guaranteed monthly benefit limit that will be paid out by the PBGC (which insures both union and single-employer corporate pensions) is about $36 per month per year of service, or about $13,000 annually with 30 years of service. This amount is far less than the PBGC single-employer guarantee of about $65,000, and it is often also far less than the level of the benefit to be paid after a proposed reduction. And unlike the single-employer guarantee, Goldowitz observes, the multiemployer guarantee is not adjusted for inflation.

“Worse, the PBGC’s multiemployer insurance fund is itself projected to become insolvent no later than 2026,” he warns. “At that point, there will be no backstop for plans that fail or for the 1.3 million people who depend on them. That includes 400,000 people in the Teamsters Central States plan alone.”

Goldowitz says it is no surprise that Congress has picked up on this challenge, given the political influence of unions. However, consensus on a solution remains elusive, even with the lobbying efforts of high-profile politicians and business leaders. Unlike the approach favored by Democrats in the House of Representatives, which would establish a government-backed loan program to assist troubled union pension, the Republican-favored approach in the Senate would permit the partition of such plans and would require accounting reforms.

“Either proposal would involve a cost to taxpayers, with interest groups citing various figures,” Goldowitz says. “Butch Lewis Act proponents [mainly Democrats] point out that retiree spending has a multiplier effect, as most retirement income is spent quickly on goods and services, keeping others at work and generating tax revenues. A compromise may be reached, but we can only speculate when that may happen or what a compromise would look like. These issues should be of concern to companies that participate in multiemployer defined benefit plans, to unions, and to retirees. They should also be of interest to those seeking to lend to or acquire such companies.”

To gauge public awareness and sentiment around multiemployer pension plans and their impending collapse, the Retirement Security Coalition recently commissioned a bipartisan poll among 2,700 likely voters in key states affected by the multiemployer pension crisis. According to the Coalition, the results clearly indicate voter recognition of the pension crisis, as well as the urgent need for Congressional action.

“The survey results show broad voter support for protecting retirees and Congress needing to make changes to multiemployer pension plans,” the Coalition reports. “Voters said overwhelmingly (92%) that protecting American retirees is essential to our economy. The survey found that three-quarters of voters recognize the urgency and need for Congress to take action. Voters support Congress taking action through a comprehensive (70%) ‘shared solution,’ including additional employer support, government assistance and additional retiree support.”


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  #867  
Old 01-20-2020, 08:47 PM
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BENEFIT CUTS

https://burypensions.wordpress.com/2...s-2-employers/
Quote:
Musician Chops (2): Employers
Spoiler:
The application to cut benefits under the American Federation of Musicians and Employers’ Pension Fund out of New York, NY is now on the MPRA website and even though it consists of 1,381 pages this might be a good one to read all the way through.

Hence this new blog series which we kick off with identifying who the Employers* are in this multiemployer plan and what they contract to contribute as a percentage of member salaries which, for reasons of negotiation, is usually a closely guarded secret.


There are 661 pages of CBAs with most listing what percentage of salary is being contributed, though 46 of them reference a Schedule A or an Appendix without including it so the spreadsheet I made up leaves their percentage blank.

The percentages range from 3% of pay for members of the Reading Symphony orchestra to 17.99% of pay for members of Bob Dylan’s 2018 and 2019 touring company and it seems geography has more to do with how much is being charged than the relative ages of the populations, as would be appropriate in a Defined Benefit arrangement. That is, unless there are a lot Reading musicians in their 20s while the average age of a member of Dylan’s touring company is 70, which could be possible.

Here is the spreadsheet and below is a listing of Employers paying 16% of pay or more.

* There are 81 pages of Employers listed in the application (pages 224 through 304) by name only.



https://burypensions.files.wordpress...ba-sorted.xlsx
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  #868  
Old 01-22-2020, 07:20 AM
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BENEFIT CUTS

https://burypensions.wordpress.com/2...mpra-filing-2/

Quote:
Breaking News: New MPRA Filing

Spoiler:
Appearing this afternoon on the MPRA website, Local 807 Labor-Management Pension Plan out of Long Island City, NY re-filed to cut benefits. The plan first filed in July, 2018 and withdrew that application in February, 2019.

From their latest 5500 filing:


Plan Name: Local 807 Labor-Management Pension Plan

EIN/PN: 51-6099111/002

Total participants @ 8/31/18: 4,337 including:

Retirees: 2,752
Separated but entitled to benefits: 815
Still working: 770
Asset Value (Market) @ 9/1/17: 158,835,925

Value of liabilities using RPA rate (3.03%) @ 9/1/17: $536,604,543 including:

Retirees: $289,057,878
Separated but entitled to benefits: $127,410,158
Still working: $120,136,507
Funded ratio: 29.60%

Unfunded Liabilities as of 9/1/17: $377,768,618

Asset Value (Market) as of 8/31/18: $159,109,114

Contributions (MB): $10,375,993

Contributions (H): $18,288,847

Payouts: $27,611,270

Expenses: $2,645,544


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  #869  
Old 01-29-2020, 05:15 PM
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https://www.ai-cio.com/news/pbgc-app...paign=CIOAlert
Quote:
PBGC Approves Facilitated Merger of New York Pension Funds
Pension lifeboat will provide three annual payments of $8.9 million to merged plan.


Spoiler:
The Pension Benefit Guaranty Corporation (PBGC) has approved a facilitated merger of two New York pension funds to help them stave off insolvency. It is the first time the PBGC has used its authority under the Multiemployer Pension Reform Act of 2014 (MPRA) to help two plans merge.

The PBGC said it will provide financial assistance to help the merger of Poughkeepsie, New York-based Laborers International Union of North America 1000 Pension Fund with the Laborers Local 235 Pension Fund of Elmsford, New York. Beginning this month the PBGC will provide three annual installments of $8.9 million to bolster the merged plan. PGBC is the lifeboat for struggling pension funds.

“PBGC’s mission is to protect the retirement security of workers and retirees in defined benefit plans and helping plans merge is one way we can do that,” PBGC Director Gordon Hartogensis said in a statement. “Through this facilitated merger, we are preventing a failing plan from going broke and preserving benefits in a financially responsible way.”

The Local 235 Plan, which covers more than 1,100 participants, is a so-called “green zone” plan, which means it has a funding ratio greater than 80%. Yellow zone plans have a funding ratio between 65% and 79%, and red zone plans are less than 65% funded. The PBGC said the merger will protect the more than 400 participants of the Local 1000 Plan, which was projected to become insolvent in 2026, without affecting participants and beneficiaries of the Local 235 Plan.

Under MPRA, PBGC has the authority to facilitate plan mergers under certain conditions, including when one or more of the plans involved is projected to become insolvent within 20 years. Plans may apply to PBGC for financial assistance to facilitate a merger if the assistance does not impair the agency’s ability to meet its existing financial assistance obligations to other multiemployer plans. The PBGC itself is in financial trouble and has said that it expects its insurance program for multiemployer pension plans to run out of money within five years.

The PBGC said, however, that it will not be hurt financially by facilitating the merger of the two New York plans. It said that the merger reduces its expected long-term loss with respect to the Local 1000 Plan. Providing financial assistance to the merged plan will not impair the agency’s ability to meet its existing financial assistance obligations to other multiemployer plans.


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Old 02-02-2020, 01:29 PM
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BAILOUT

https://thesouthern.com/news/local/g...4.html#new_tab
Quote:
Retired Southern Illinois coal miners and widows celebrate federal deal to save their pensions

Spoiler:
After years of lobbying Congress, thousands of retired coal miners and widows found out late last month that federal lawmakers had finally reached a deal to bail out their ailing pension fund.

The deal affects about 8,000 United Mine Workers of America retirees in Illinois, most of whom live in this region, and about 100,000 people nationally.

'Way past due': West Frankfort monument planned to honor men killed in 1951 Orient 2 Mine disaster
LOCAL NEWS
'Way past due': West Frankfort monument planned to honor men killed in 1951 Orient 2 Mine disaster
Molly Parker
“People have been calling me — especially the widows — and saying that this is the best Christmas present they’ve ever received,” Jack McReynolds, a retired coal miner from West Frankfort, told The Southern Illinoisan earlier this week. “It was basically a life or death situation for many, many retirees and widows.”

McReynolds was among dozens of local retired miners who have traveled to Washington, D.C.; Columbus, Ohio; Evansville, Indiana; and elsewhere in recent years to attend rallies and persuade lawmakers to make their case for the measure.

The Bipartisan American Miners Act of 2019 allows the U.S. Treasury to provide up to $750 million annually from the Abandoned Mine Reclamation Fund to cover unfunded pension obligations of the UMWA’s multiemployer pension plan. It was expected to become insolvent within two years.

Coal companies are required to pay a per-ton fee into the reclamation fund. Beginning in 1992, Congress allowed some excess money from the fund to help support miners’ health care. Passage of the measure in December extends use of the funds to support their pensions.


In a statement, UMWA International President Cecil Roberts called the deal a “tremendous victory” only made possible by the nonstop efforts of the union's membership to call attention to the matter. The bill was tied to the $1.4 trillion spending package that Congress passed — and Trump signed — the week before Christmas.

Gary Hastings, another retired coal miner from Du Quoin, said that the prospect of losing their pensions has caused a lot of distress for Southern Illinois’ UMWA retirees and widows.

Most pensioners only receive a few hundred dollars monthly. Yet, for seniors living on a fixed income, he said, that money is critical. It’s also important to the communities where people live and purchase groceries and other necessities because it helps support their economies, he said.

Hastings worked as a coal miner for more than 30 years. He spent the vast majority of his career working at Captain Mine in rural Perry County near Percy and retired in 2000. He has been active in the fight to secure retirees’ health care and pensions as president of the UMWA Local 1392. He was among the UMWA activists to travel to Washington and ask the Illinois delegation to join in support of the bill.

“They were all very supportive,” he said. “This was truly a bipartisan effort. That was what was so good about it,” he said.



Keep on truckin': Rend Lake College truck driver training program is expanding
LOCAL NEWS
Keep on truckin': Rend Lake College truck driver training program is expanding
Molly Parker
In a statement, U.S. Rep. Mike Bost, R-Murphysboro, said he was part of a bipartisan coalition of congressional leaders that has for years sought a long-term solution for the UMWA retirees and their widows.

“As the grandson of a UMWA representative, Southern Illinois’ mining heritage is, quite literally, in my blood,” Bost said. “For years, our miners and their families have faced uncertainty over whether or not their pensions would be there when they needed it most … I couldn’t be happier that these dedicated men and women will have the benefits they’ve earned and the peace of mind they’ve been lacking for so long.”

The pension that supports UMWA retirees has been gutted by compounding problems, including the years long decline of the industry, the 2008 financial crisis, and a string of bankruptcies through which coal companies have successfully jettisoned their obligations to workers.

Illinois coal industry grapples with legal marijuana, drug screening uncertainties
LOCAL NEWS
Illinois coal industry grapples with legal marijuana, drug screening uncertainties
Gabriel Neely-Streit
Though it ultimately passed with bipartisan support, the deal was controversial. Some Republican lawmakers argued that it set a dangerous precedent to bail out a retirement fund for private sector workers. According to a Dec. 24 article from the New York Times, this is the first time in 45 years that Congress has elected to take such an action. Numerous other multiemployer pension plans, which cover workers in a single industry, are also severely underfunded and at risk of insolvency, such as the one that provides retirement checks to the Teamsters.



The UMWA argued that few industries have suffered as many job losses as coal mining, and pointed to the fact that there was an available federal funding source — excess money in the reclamation fund that coal companies pay into. Union activists also say that President Harry Truman committed the federal government to backing UMWA pensions for workers’ lifetimes when he helped broker a deal in 1947 to end a strike that threatened to cripple the U.S. economy.

“In my opinion, we shouldn’t have had to negotiate anything. We already had a signed agreement by the president of the United States,” said McReynolds, president of the UMWA Local 2420. He retired in 1994, also after a roughly three-decade career as a coal miner. He worked the last 20 years of his career at Western Fuels’ Brushy Creek Mine in the unincorporated Saline County community of Harco.

Photos: Face of coal mining today
PHOTO GALLERIES
Photos: Face of coal mining today
“It all worked out, thank God, but it was due to our efforts rallying en masse,” he said.

In addition to providing pension security, the legislative action also protects healthcare benefits for about 13,000 miners who stood to lose their benefits because the companies they worked for had declared bankruptcy since 2017. That year, Congress reached an agreement to shore up health benefits for coal miners whose plans were set to expire, but people affected by more recent bankruptcies were not included.


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