MORGANTOWN — Both of West Virginia’s U.S. senators called attention to the approaching pension plight of coal miners and other union workers Wednesday – highlighting the need for quick Congressional action to solve the problem.
“The Miners’ Pension Fund alone, a critical plan which covers 82,000 retired miners – 25,000 in West Virginia – and 20,000 full vested current workers, is projected to become insolvent by 2022,” said Sen. Joe Manchin, D-W.Va., in a release co-issued by several Democrat senators.
Various multiemployer pension plans are on the verge of insolvency, the senators said. “The pension crisis threatens the retirement of up to 1.5 million workers and retirees nationwide and could put small businesses across the country in jeopardy.”
If the plans are allowed to fail, they said, they no longer will be able to pay promised benefits, and taxpayers and small businesses would be at risk of having to pay billions because the Pension Benefit Guaranty Corporation would be on the hook for billions of dollars it cannot pay. PBGC is the arm of the federal government that insures pension plans.
Manchin noted in a Wednesday press conference on the topic that the miners’ fund insolvency could come even sooner, if Murray Energy goes bankrupt. “We are one bankruptcy away from accelerating this two years.”
Murray is the last major company still contributing to the United Mine Workers of America pension plan, according to media reports. Manchin said, “By September 2020 coal miners could see drastic cuts to their benefits if we don’t do something now. If the Miners’ Pension Fund becomes insolvent, a snowball effect will happen, with other pension plans following suit.”
Murray produces about 76 million tons of coal each year, employing nearly 7,000 people in six states and Colombia, South America. Murray operates five local mines.
And Murray is facing financial problems with the downturn in prices and decreased demand for coal as natural gas booms. On Oct. 2, it entered into forbearance agreements with a number of major creditors under which, Murray said, “the lenders have agreed to forbear from exercising any and all remedies available to them in respect of any event of default arising from the missed amortization and interest payments due on September 30, 2019.”
Those agreements extended through Monday and were amended Tuesday to extend through Oct. 28, with possibility of further extension.
“The forbearance agreements, Murray said, “are expected to allow Murray Energy to continue discussions with its lenders about various strategic options to strengthen the company’s business, improve its liquidity position, deleverage its balance sheet, and achieve a more sustainable capital structure.”
Sen. Shelley Moore Capito, R-W.Va., addressed the same problem in a Wednesday evening Senate floor speech.
West Virginia families worried about their pensions routinely visit her in her office, write to her and talk to her when she travels around the state.
“We’re not talking about ultra-lavish pensions here,” she said. They average about $590 per month. “These hardworking men and women deserve the pensions they were promised.”
Manchin and Capito both urged Senate leaders to take action this on any of a number of bills aimed at solving the pension problem.
One is Manchin’s American Miners Act, S 27. It would amend the Surface Mining Control and Reclamation Act to require the Treasury Department to transfer additional funds to the pension plan from excess Abandoned Mine Reclamation Fund money. The bill also increases the annual limit on transfers from $490 million to $750 million.
Capito sponsored the similar Miners Protection Pension Act, S 671, which has a corresponding House twin, HR 935, by Rep. David McKinley, R-W.Va.
Also floating in limbo are several other Democrat bills: the recently introduced Butch Lewis Act, S 2254; and the Rehabilitation of Multiemployer Protections Act, HR 397. This one would create the Pension Rehabilitation Administration within the Department of the Treasury and a related trust fund to make loans to multiemployer defined benefit pension plans,. It passed the House and is sitting in the Senate.
Manchin commented on the Senate’s inaction, “This is atrocious and for us to sit back and let it happen is absolutely sinful. We’re not going to let it.”
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