The United Coal Workers of America (UMWA) 1974 Pension Plan, a multiemployer pension plan funded by US coal companies, is suing Peabody Energy and Arch Coal in an attempt to force the two companies to take on US$800 million of Patriot Coal’s pension liabilities that the miner may escape as part of its bankruptcy proceedings.
Patriot Coal, which entered chapter 11 bankruptcy for the second time earlier this year, was formed from assets that were once owned by Peabody and Arch. As part of its restructuring, the company plans to leave the pension fund, which is already underfunded.
“No Peabody company is signatory to a labour agreement that required contributions to the 1974 UMWA Pension Plan and the company has no liability to the plan” said Peabody Energy in response to the lawsuit. “We believe the pension plan’s claims are completely without merit and we will vigorously defend against them.”
Meanwhile, an Arch Coal spokesperson called the legal action “patently absurd”.
Patriot is seeking to reduce its debt by selling some of its operations to Blackhawk Mining. But as condition of this sale, Blackhawk would not be required to take on any liabilities associated with the pension plan.
Earlier this month, four US senators introduced legislation aimed at securing the pensions and benefits for coal miners that are currently threatened by the downturn in the coal industry – and the slew of bankruptcies that this has caused.
“Our coal miners are some of the hardest working people in America, and they have dedicated their lives to powering this nation and keeping it the strongest in the world,” said Senator Joe Manchin (D-WV), one of the cosponsors of the bill. “We have a responsibility to protect their hard-earned pensions and health benefits. This bill will provide certainty and peace of mind to our retired miners and their families by ensuring they receive the benefits they’ve earned and deserve, while holding employers accountable for the commitments they make to their workers.”
To address these issues, the proposed Miners Protection Act would Amend the Surface Mining Control and Reclamation Act to transfer funds in excess of the amounts needed to meet existing obligations under the Abandoned Mine Land (AML) fund to the UMWA 1974 Pension Plan to prevent its insolvency and make certain that retirees who lose health care benefits following the bankruptcy or insolvency of his or her employer eligible for the 1993 Benefit Plan.
The bills cosponsors also include senators Shelley Moore Capito (R-WV), Bob Casey (D-PA) and Sherrod Brown (D-OH).
"There are literally thousands of retirees and widows throughout America's coal-producing regions for whom this legislation is a matter of life or death," said UMWA International President Cecil E. Roberts. "Through no fault of their own, they are in critical danger of losing health care benefits they earned though a lifetime of dangerous, backbreaking work. This legislation would preserve those benefits, and ensure that they have the dignified retirement they deserve."
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/mining/20072015/coal-workers-pension-plan-sues-peabody-energy-and-arch-coal-2586/