Miners Pensions Secured

The SECURE Act was part of the $1.4 trillion spending bill for FY 2020 but that bill also made some pensions less secure to pay for the bailout of the United Mine Workers of America 1974 Pension Plan:
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To pay for this bailout (as noticed on the ACOPA message board):

The budget bill includes the Secure Act provisions but under Division M (dealing nominally with Coal Miner pension and health benefits) at section 104, p 1414, moves the in-service distribution age from 62 to 59 ½ under IRC 401(a)(36), effective for plan years beginning after 12/31/19.  This applies for defined benefit plans but also for 457(b) plans.

The main thrust of Division M:

If the dollar limit specified in paragraph (3)(A) exceeds the aggregate amount required to be transferred under paragraphs (1) and (2) for a fiscal year, the Secretary of the Treasury shall transfer an additional amount equal to the difference between such dollar limitation and such aggregate amount to the trustees of the 1974 UMWA Pension Plan to pay benefits required under 1that plan.

6 responses to this post.

  1. Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on December 18, 2019 at 3:09 pm

    Bailout Nation= Sucks

    Reply

  2. Posted by aka chicken little on December 19, 2019 at 8:38 am

    Any pension bailout won’t be secure for long. Our cooking the books specialists at the gubmint are calling our price inflation to be 1%-2% while in fact it is probably closer to 10%. When it gets to what they call 7%-8% it will in fact be running 15%-20% and it won’t take long to whack the pensions to a payable sum that doesn’t buy a whole hell of a lot. Lower end houses are$200K–$400K now and codgers are the only ones able to afford one. A truck is $60K and cops and firemen are the only ones finding the payments affordable. Don’t be involved in an accident. You’ll be paying through the nose for your ride to emergency care. They’ll give you a helicopter ride even if an ambulance would work just fine.

    Reply

    • Posted by NJ2AZ on December 19, 2019 at 2:06 pm

      spot on. if i were assigning probabilities, high (but not hyper) inflation is at the top of the pack in terms of how i expect all this to play out

      Someone had a piece recently (it might have been Jane the Actuary but i’m not certain and a quick google didn’t turn it up) that said a few years of 10% inflation would clear out a lot the problems

      Reply

  3. Posted by geo8rge on December 19, 2019 at 9:46 am

    “moves the in-service distribution age from 62 to 59 ½ ”

    Does this mean they can retire 2.5 years earlier?

    Reply

    • No, this is just how they decided to pay for the bailout since, presumably, these bills have to be revenue-neutral. The thinking is that if you allow people in all DB plans to start benefits at 59-1/2 (even if still employed) then they will and the government will get more tax money and that will pay for the UMW bailout.

      Reply

  4. […] connected some dots on how the bailout of the United Mine Workers of America 1974 Pension Plan came […]

    Reply

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