Murray Energy Bankruptcy and UMW Pension

Murray Energy, the largest private coal miner in the United States, filed for bankruptcy protection Tuesday and the status of the United Mine Workers (UMW) of America 1974 Pension Plan is a concern:

In addition to threatening the jobs of around 7,000 current Murray Energy employees, the company’s bankruptcy filing could also spell disaster for tens of thousands of retired miners.

“Murray Energy is the last major company contributing to the pension plan of the United Mine Workers of America,” CNN reported. “The pension plan’s depleted funding will only get worse if Murray Energy is relieved of its pension requirements.”

Cecil Roberts, president of the United Mine Workers, predicted in a statement that Murray Energy will attempt in bankruptcy proceedings to shed “its obligations to retirees, their dependents, and widows.”

“We have seen this sad act too many times before,” said Roberts. “But that does not mean we will sit idly by and let the company and the court dictate what happens to our members and our retirees.”

What will happen to those pensions?

Murray Energy retirees will have a large part of their benefits protected by the PBGC (as long they exist – the PBGC that is). What bankruptcy does, and several other coal companies took that route recently, is it allows those bankrupt companies to avoid making their share of withdrawal liability payments of over $3 billion for other people’s benefits.

From the latest UMW 5500 filing:

Plan Name: United Mine Workers of America 1974 Pension Plan
EIN/PN: 52-1050282/002
Total participants @ 6/30/18: 93,030 including:
Retirees: 83,877
Separated but entitled to benefits: 6,613
Still working: 2,540

Asset Value (Market) @ 7/1/17: $2,779,954,000
Value of liabilities using RPA rate (3.04%) @ 7/1/17: $9,285,479,900 including:
Retirees: $8,202,479,207
Separated but entitled to benefits: $612,497,098
Still working: $470,503,595

Funded ratio: 29.94%
Unfunded Liabilities as of 7/1/17: $6,505,525,900

Asset Value (Market) as of 6/30/18: $2,450,655,937
Contributions H-Employers: $30,067,243
Contributions H – Others: $3,880,972
Contributions MB: $112,301,000
Payouts: $613,836,688
Expenses: $26,401,292

23 responses to this post.

  1. Posted by aka chicken little on November 1, 2019 at 9:30 am

    It’s killing me, so-called adults refusing to recognize the financial facts of life. It’s like this, when you are out of financial resources you are pretty much bankrupt. You know, like yesterday’s story! This crazy dishonesty is making the problem much worse than it had to be. The country and the world is awash in foolish finance. Pathetic! Disgusting!

    Exactly what it deserves, replied Francisco.

    Reply

    • Posted by geo8rge on November 2, 2019 at 12:54 pm

      “so-called adults refusing to recognize the financial facts of life. ”

      Can you name the so-called adults willing to recognize the financial facts of life? The country is being run by generation Iraqistan. It’s not just the ‘banksters’, the Pentagon or NJ it’s pretty much everyone.

      Reply

  2. Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on November 1, 2019 at 2:03 pm

    This is how an Elizabeth Warren could be elected President. And trust me on this, sooner or later she, or someone like her, will be elected if the country does not stop going down it’s current path. We have two sets of citizens, the 1% and public employees, of which now a large % are 1%er’s.

    No one else is doing all that good.

    Reply

    • Posted by NJ2AZ on November 1, 2019 at 2:31 pm

      as long as society allows anyone who wants to to have as many kids as they want to without consequence, there is no fix for this. too many people can’t make their own way in the world, and all the natural ways this would be kept in check have been eroded over the last century or so.

      we’re all boned.

      Reply

    • Posted by MJ on November 3, 2019 at 7:36 am

      Rex, we are one election away…best case scenario Trump is re-elected and then next time around another Elizabeth Warren type is elected

      Unless something really major turns it all around but I doubt it

      Reply

  3. Posted by Anonymous on November 1, 2019 at 6:41 pm

    Another tough read….

    Reply

  4. I was reading in one article where NJ has close to 450,000 public workers, it’s the highest of all the states and we wonder why there is a financial problem although other states are struggling with the same thing. That number sounded high to me although it includes any and all state, municipal, county workers. I’m guessing it doesn’t include Federal workers since the article was talking about pension liabilities. If one were to add in all the Federal workers, I wonder what the percentage would be compared to the private sector workers.

    Reply

  5. https://moneywise.com/a/state-employee-pension-debt-per-resident

    Correction, NJ is not home to highest number of public workers but NY has 1.5 million, it’s hard to believe. These states are not that big as compared to others.

    Nuts!

    Reply

    • Posted by boscoe on November 2, 2019 at 10:32 pm

      According to the U.S. Census Bureau, New Jersey has fewer state and local government workers (including teachers) than many other states, such as Georgia, North Carolina, Pennsylvania, Illinois, Florida, Texas, California and New York. The number of public employees has almost nothing to do with the geographic size of a state; it is related to population, numbers of counties, municipalities and school districts, and resident income levels.

      Reply

  6. Posted by MJ on November 3, 2019 at 7:34 am

    Boscoe, yes I realize that it has to do with population, etc but that’s a lot of public workers and I get it NJ has many counties……just seems like an awful of public workers compared to the dismal business climate.

    And I also wonder, if NJ has fewer public workers than why is it at the top of the heap for debt, underfunded pensions, etc??

    Reply

    • Posted by boscoe on November 3, 2019 at 3:53 pm

      New Jersey isn’t at the top of the heap for public debt, whether measured in absolute terms, on a per-capita basis, or as a percentage of state GDP.

      This site has a lot of good information on state and local debt comparison:

      https://www.usgovernmentdebt.us/state_debt_rank

      As far as unfunded pension liabilities are concerned, New Jersey is pretty much a mess, although not alone in that regard (e.g., Connecticut, Illinois, Kentucky). This blog has put out a number of state-by-state comparisons on pension “debt.” But in simplest terms, New Jersey has a serious pension funding problem because the promises made in law to public workers have not been matched by sufficient funding to secure those promises.

      Reply

      • Posted by skip3house on November 3, 2019 at 5:24 pm

        “…. promises made in law to public workers have not been matched by sufficient funding to secure those promises…” Meaning…? Law is void, or the NJ Legislators get charged with not funding per their law?

        Reply

      • Posted by PS Drone on November 3, 2019 at 10:50 pm

        Since many of those “promises” were outrageously overly generous, the problem lies there, not in the underfunding. Reduce the benefits to what they should have been (benefits @ age 66, not 55, and a cap of $60K per annum) and problem(s) solved.

        Reply

        • Posted by Tough Love on November 3, 2019 at 11:23 pm

          Yup, that’s what I have been saying ….. and have mathematically demonstrated on this Blog ….. many times. Specifically…………

          The ROOT CAUSE of the pension mess infecting America’s States and Cities is the ludicrously excessive “generosity” …… …..with a RICH formula/provision driven “value” upon retirement costing Taxpayers 10+ times the 3%-of-pay 401K matching contributions that is all most Private Sector workers typically get from their employers.

          The lack of full funding (as often cited by Public Sector Unions/workers) is not the CAUSE of the problem, but a CONSEQUENCE of the true underlying root cause …….. ludicrously excessive Pension (and Benefit*) generosity.

          * Who but PUBLIC Sector workers get free or heavily subsidized employer-provided retiree healthcare today? Certainly NOT Private Sector Taxpayers. So WHY should Private Sector Taxpayers pay for a benefit that THEY don’t get ?

          Reply

          • Posted by boscoe on November 5, 2019 at 11:47 pm

            Let me ask you geniuses something: New York State public pensions are as “ludicrously excessive” as New Jersey’s. But the New York state pension systems for public employees and teachers are very well funded. Why? Because the state has paid into the funds at or near the actuarial requirements. So when I say that New Jersey’s pension promises have not been matched by sufficient funding to secure those promises, what exactly is your problem? A government can support a generous benefit if it backs it up with funding, or it can fail to support a much more restrictive benefit if it doesn’t do so. There’s no value judgment in play here, except by you folks.

          • Posted by Tough Love on November 6, 2019 at 12:58 am

            boscoe,

            If you dig in to the details, you will find that NYS (but certainly NOT NYC) has nearly fully funded its Public Sector pensions (of course not using conservative assumptions, but very optimistic assumptions) via VERY VERY high taxes.

            ANY pension (no matter how generous) CAN be fully funded if you throw enough money at it, but is that fair to Taxpayers ?

            My metric has always been ………… after adjusting for demonstrable difference in “wages” (and then only after adjusting for hours typically worked), the annual Taxpayers contributions towards the cost of Public Sector pensions & benefits should be very close to what Private, Sector Taxpayers typically receive for those items from their employers ….. and right now those Taxpayers contribution are many multiples GREATER.

  7. Posted by boscoe on November 6, 2019 at 12:23 pm

    Good grief, TL (and company): keep me out of your apocalyptic nightmares. I was simply responding with what I thought was factual information to a several questions asked by MJ about New Jersey’s debt situation. Questions that were (by the way) based on inaccurate assumptions. Try this analogy: if someone were to ask why the national debt is so high, I might say it’s because the federal government runs a deficit each year and borrows to make up the difference. Those differences add up to the national debt. Whereas you and some of the other polemicists that reside here might say, “It’s because we give poor people too much free stuff,” “It’s because the military has too many toys,” It’s because of graft and corruption.” One answers the question that was asked. The other answers a question that wasn’t asked. Have a good day, I’m going out to rake leaves. 🙂

    Reply

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