United Mine Workers Update

22,000 retired union coal miners in seven states, members of the United Mine Workers of America (UMWA), whose former companies went bankrupt over the past few years are counting on Congress to keep their health benefits through the week.  According to the the UMWA website:

Current status of legislation to protect health care benefits

FOR IMMEDIATE RELEASE

APRIL 27, 2017

Current status of legislation to protect health care benefits

“Congress will pass a temporary, stop-gap funding bill today that will fund the government through May 5, 2017. It includes language that will extend your benefits through that date.

We expect that the full government funding bill Congress passes will include funding for your benefits. Language doing that is in both the House and the Senate version of the legislation. We believe that your benefits will be extended unless, for some reason, Congress shuts the government down.”

But as for the UMWA Pension Plan, the outlook is even darker.

A plan that may be too underfunded for MPRA just submitted their 5500 filing for the year ended June 30, 2016:

Plan Name: United Mine Workers of America 1974 Pension Plan
EIN/PN: 52-1050282/002
Total participants @ 6/30/16: 99,758 including:
Retirees: 88,272
Separated but entitled to benefits: 5,402
Still working: 6,084

Asset Value (Market) @ 7/1/15: $3,808,170,000
Value of liabilities using RPA rate (3.34%) @ 7/1/15: $9,575,710,282 including:
Retirees: $8,103,574,429
Separated but entitled to benefits: $594,748,101
Still working: $877,387,752

Funded ratio: 39.77%
Unfunded Liabilities as of 7/1/15: $5,767,540,282

Asset Value (Market) as of 6/30/16: $3,140,278,873
Contributions: $55,103,888
Payouts: $621,737,324
Expenses: $44,836,208

Then there is question 4g of Schedule H:

So 57.5% of the remaining $3.14 billion of trust assets as of June 30, 2016 was pure guesswork as to value in a plan that is running annual payment deficits of over $610 million.

12 responses to this post.

  1. Posted by Sandy Rich on April 30, 2017 at 8:51 am

    One of the challenges to these plans, small in comparison to making the benefit payments, is managing down expenses. If you look at the administrative expenses of multi-employer plans, especially at risk plans, you will see expense levels that are too high. One of the challenges presented by the PBGC to insolvent ME plans receiving funding through the PBGC ME Plan Insurance fund is reduction of expenses. It is a challenge that is resisted and that can lead to removal of appointed Trustees.

    Reply

  2. Posted by George on April 30, 2017 at 4:28 pm

    Payouts: $621,737,324 Retirees: 88,272, Average payout $7040. How much will the PBGC pay?

    Reply

    • Probably most of it which is why there is no point in using MPRA and the only obvious plan now is to keep fees (which went up 50% between 2015 and 2016) flowing for as long as possible.

      Reply

  3. Posted by Anonymous on May 2, 2017 at 12:57 pm

    Off-topic but important …

    What is the status (did Gov Christie sign it ?) of NJ S-3040 granting NJ police the power to “manage” their own pension Plan, with “manage” appearing to not only mean choosing investments, but also determining their own pension benefit levels and other Plan provisions?

    Reply

    • Here is the what appears on the NJ legislature website and from what I can tell it’s passed and only awaiting governor’s signature:

      Identical Bill Number: A99

      Sweeney, Stephen M. as Primary Sponsor
      Kean, Thomas H., Jr. as Primary Sponsor
      Prieto, Vincent as Primary Sponsor
      Sumter, Shavonda E. as Primary Sponsor
      Schaer, Gary S. as Primary Sponsor
      Greenwald, Louis D. as Primary Sponsor
      Rible, David P. as Primary Sponsor
      Dancer, Ronald S. as Primary Sponsor
      Beck, Jennifer as Co-Sponsor
      Bucco, Anthony R. as Co-Sponsor
      Oroho, Steven V. as Co-Sponsor
      DeAngelo, Wayne P. as Co-Sponsor
      Lagana, Joseph A. as Co-Sponsor
      Wimberly, Benjie E. as Co-Sponsor

      2/28/2017 Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee
      3/6/2017 Transferred to Senate Budget and Appropriations Committee
      3/13/2017 Reported from Senate Committee, 2nd Reading
      3/13/2017 Senate Amendment (34-0) (Sweeney)
      3/13/2017 Emergency Resolution (37-0) (Kean)
      3/13/2017 Passed by the Senate (37-0)
      3/16/2017 Received in the Assembly, Referred to Assembly Appropriations Committee
      3/20/2017 Reported out of Assembly Committee, 2nd Reading
      3/23/2017 Substituted for A99
      3/23/2017 Motion To Recommit to AAP (Auth)
      3/23/2017 Motion To Table (Voice) (Greenwald)
      3/23/2017 Passed Assembly (Passed Both Houses) (60-4-11)

      Fiscal Estimate – 3/13/17; as introduced – 4 pages PDF Format HTML Format
      Statement – SBA 3/9/17 – 2 pages PDF Format HTML Format
      Introduced – – 51 pages PDF Format HTML Format
      Floor Statement – Senate 3/13/17 – 2 pages PDF Format HTML Format
      Statement – AAP 3/20/17 1R – 2 pages PDF Format HTML Format
      Reprint – – 49 pages PDF Format HTML Format
      Fiscal Estimate – 3/30/17; 1R – 4 pages PDF Format HTML Format
      Committee Voting:
      SBA 3/9/2017 – r/favorably – Yes {10} No {1} Not Voting {0} Abstains {2} – Roll Call
      AAP 3/20/2017 – r/favorably – Yes {11} No {0} Not Voting {0} Abstains {0} – Roll Call

      Session Voting:
      Sen. 3/13/2017 – 2ND READING – Yes {0} No {0} Not Voting {40} – Voice Vote Passed
      Sen. 3/13/2017 – AMEND – Yes {34} No {0} Not Voting {6} – Roll Call
      Sen. 3/13/2017 – EMERGENCY – Yes {37} No {0} Not Voting {3} – Roll Call
      Sen. 3/13/2017 – 3RDG FINAL PASSAGE – Yes {37} No {0} Not Voting {3} – Roll Call
      Asm. 3/23/2017 – SUBSTITUTE FOR A99 – Yes {0} No {0} Not Voting {80} Abstains {0} – Voice Vote Passed
      Asm. 3/23/2017 – MOTION TAB MOTION – Yes {0} No {0} Not Voting {80} Abstains {0} – Voice Vote Passed
      Asm. 3/23/2017 – 3RDG FINAL PASSAGE – Yes {60} No {4} Not Voting {5} Abstains {11} – Roll Call

      Reply

      • Posted by Anonymous on May 2, 2017 at 2:15 pm

        That’s a lot more than I found, but I got to the same place …. passed in BOTH houses, but in limbo with Gov, Christie (not signed or vetoed). Why the LONG delay in making a decision ???

        I was wondering, because Christie JUST sign & vetoed dozens of bills ….. but nothing on this …… a bill, the DEFEAT of which I believe is critical to NJ’s future.

        Just look at Dallas TX to see what happens when benefit level determinations are put in the hand of Plan participants……. DROP account GICs with “guaranteed” rates of 8% to 10% in an investment environment with 1% to 3% on such products and when DROP Asset earnings have averaged less than 2% over the past decade.
        ****************************************
        While I “might” be OK with their Union overseeing the investment of Plans assets (if accompanied by 100% transparency as to investment choices, fees, commissions, and the choice of ALL advisors), I cannot come up with even a single justification for giving the UNIONS control over benefit levels.

        How can this NOT turn out badly, when ALL downside risk remains with the taxpayers?

        Reply

        • Posted by George on May 3, 2017 at 1:32 pm

          “Why the LONG delay in making a decision ???”

          Maybe someone figured out this will be a bad idea for the bureaucrats and hedge funds that make up the pension assets. What happens if the police fire pension starts to sells the alternative assets?

          Reply

          • Posted by NY on May 4, 2017 at 4:47 pm

            This Bill is seemingy inane, but need to keep in mind: Anything today’s State Leg can do, a future State Leg can undo…

          • Posted by Anonymous on May 4, 2017 at 9:05 pm

            I think this bill is WAY more than “inane”. While the Unions may hold off for a while (as a phony show of good faith), just look at what they WILL have the authority to do (and it’s WAY WAY more than just managing investments) …. below are two paragraphs from the billtrack50 website summarizing this bill:

            (1) Under the bill, the board of trustees has the authority to establish a process for the review, approval, and appeal of applications for retirement. The bill provides the board of trustees with authority to modify the system’s member contribution rate; cap on creditable compensation; formula for calculation of final compensation; age at which a member may be eligible for and the benefits for service or special retirement; and standards for approval, medical review policies, and benefits provided for disability retirement. The bill allows the board to reinstate cost of living adjustments for retirees. The bill also allows the board of trustees to apply an adjustment to the monthly retirement allowance or pension originally granted to any member. The bill provides that the board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in statute for the PFRS as the board determines to be reasonable and appropriate, or modify any benefit.

            (2) Moreover, the bill requires employers to pay to the board of trustees their required contribution to the retirement system on a quarterly basis. If employers do not make payment of the required amount of an employer’s obligation within 30 days of the due dates, the board of trustees must notify the Director of the Division of Local Government Services in the Department of Community Affairs. Upon certification by the board to the director of an employer contribution payment being 30 days past due, the director will withhold any State aid payments that are disbursed by the Division of Local Government Services from the employer in an amount equal to the amount of the employer contribution due to the board.

          • Posted by NY on May 4, 2017 at 10:14 pm

            @anonymous: all true, but a future legislature can just as easily dial it all back, should it wish…ultimately it will come down to what public opinion wants, as manifested by the members of the legislature…

          • Posted by Anonymous on May 4, 2017 at 11:49 pm

            Responding to NY,

            Yes, the Legislature can “dial it back”, but for example, if the Union reinstated it’s own (now suspended) COLAs (even BEFORE reaching the higher funding level in the original COLA-suspension Legislation), do you think it will EVER be suspended again (before total/imminent collapse of the Plan) …..even with a VERY CLEAR financial need to do so?

            Just doing that ONE thing would cost NJ’s Taxpayers $ BILLIONS.

            AND if they increased their formula pension, wouldn’t the Union argue that a future Legislature CANNOT reverse that increase for any vested participant?
            Of course they would …… there is little more greedy and arrogant than a Public Sector Union.

  4. […] pension referred to above is the United Mine Workers of America 1974 Pension Plan which as of June 30, 2016 had 57.5% of its remaining $3.14 billion of trust assets  in alternative […]

    Reply

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