Archive for the ‘Multiemployer Pensions’ Category

Bigger Bailout

Rachel Greszler noted 6 Things Every American Should Know About Congress’ Bailout for Select Coal Miners’ Pensions:

  1. This Is a Taxpayer Bailout.
  2. This Does Not Fix the Multiemployer Pension Crisis.
  3. The U.S. Government Did Not Make a Promise to Coal Miners
  4. This Could Lead to More Bailouts.
  5. One Bailout Is Never Enough.
  6. This Bailout Does Nothing to Fix the Problem.

All true and all points you would expect to be made by a conservative think tank but when it comes to advocating a better solution Ms. Greszler proposes:

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UMW Pension Postmortem

“Never attribute to malevolence what is merely due to incompetence”
Arthur C. Clarke, 3001: The Final Odyssey

Whereas Edward Siedle sees conspiracy as the prime cause of the demise of the United Mine Workers of America 1974 Pension Plan:

While PBGC publicly states its mission is to ensure that corporations sponsoring defined benefit pensions are prepared to honor their obligations to workers, its private agenda is to assist corporations in abandoning their pension obligations. The U.S. government’s belief is that if American corporations are to compete globally in the future, they must be freed from promises they made to their employees over the past 60 years or so. Unfortunately, several generations of America workers must be stripped of their retirement security if this effort to boost corporate profitability is to be successful.

I see regulatory capture.

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UMW Pension Bailout Bill in Senate

U.S. Senate Majority Leader Mitch McConnell (R-KY) delivered the following remarks yesterday regarding a bill he introduced to “protect health care and pension benefits for Kentucky miners – the Bipartisan American Miners Act.”

As explained in a prior blog, it is not miners’ pensions that this bill seeks to protect (the PBGC can still do much of that) but rather the income that people running the United Mine Workers of America 1974 Pension Plan (including union employees and plan trustees) get.

To understand where that $650+ million per year required to prop up the plan would be coming from we look to a similar bill introduced last January for some history:

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PBGC fund could be tapped for multiemployer bailout

Per P&I:

Congress could tap the PBGC’s single-employer insurance program as a “quick fix” should the agency’s multiemployer program become insolvent, said Michael Kreps, Washington-based principal at Groom Law Group LLP during a keynote address Tuesday at Pensions & Investments West Coast Defined Contribution conference in San Diego.

In a subsequent interview Mr. Kreps elaborates:

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Kentucky Pension McGuffin

Election day means no real news even when there should be.

There is a close governor’s race in Kentucky, a state that has a lot of coal miners and public employees who need bailouts of their endangered pensions, yet coverage (at least by PBS – see full segment from Newshour at bottom of this blog) continues to distract with occasional truth seeping though. For example, another indication that a bailout of multiemployer plans is coming:

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The Joint Committee on Employee Benefits (JCEB) of the American Bar Association met with representatives from the Pension Benefit Guaranty Corporation (PBGC) on May 8, 2019 for an informal discussion of a number of broad topics that were agreed upon in advance. JCEB representatives prepared a summary of matters discussed at the meeting and here is my précis:

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UMW Snowballing Widows

Spurred by Murray Energy’s bankruptcy this week Senator Joe Manchin (D-WV) looked to move the multiemployer bailout bill warning:

For Senator Munchin’s full Senate speech (along with what was probably Guy Clark’s last public performance) see the bottom of this blog.

As it stands he is wrong. 5500 data shows that about 30% of the retirees are beneficiaries (25,580 out of 83,877) while the average monthly pension is about $800 ($613,836,688 total annual payouts). Most importantly, a widowed beneficiary is likely to keep getting a large part of that monthly pension as long as the Pension Benefit Guaranty Corporation (PBGC) exists.

To see a list of those who would have payments eliminated you can check out the Schedule C attachments to the United Mine Workers of America 1974 Pension Plan 5500 filings which show service providers who get at least $5,000 annually from plan assets. Many are getting less lately (though not the plan trustees):

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