In 1950, the United Mine Workers of America (UMWA) established a pension plan to give miners a modicum of financial security after they retired. Another pension plan was set up in 1974, and the two eventually merged. With multiple companies paying into the fund and coal enjoying an unassailable position throughout most of the 20th century, the idea that the well would run dry probably never occurred to many people.
It only took a little less than 70 years, though, for the fund to be endangered. The protracted decline of the coal industry, the large number of retirees and the devastating effects of the 2008 financial crisis have put the retirement fund on the track to insolvency. As of September, Murray Energy was the last coal company that was still paying into the fund. The following month, Murray filed for bankruptcy.
After some prolonged drum-beating by legislators in states where the coal industry once reigned, Congress approved a plan last month that would bolster the fund and keep benefits flowing to the 120,000 retired miners who rely on it. President Trump signed it a couple of days later. It will boost the pension plan by as much as $750 million
The solution devised by lawmakers would shift money from the Abandoned Mine Lands Reclamation Fund to prop up the UMWA pension plan. This is not without precedent – almost three decades ago, money from the abandoned mines fund was used to help cover health care costs for retired miners.
The New York Times noted that failing to act “would have had dire consequences: Tens of thousands of miners, many in already economically distressed areas, would have lost their benefits. And coal pensions support not just families but sometimes whole towns.”
It should be noted that the payouts to miners are hardly munificent. The Times noted that one retired miner in Kentucky gets about $700 a month. That works out to $8,400 per year.
Now that a precedent has been set, the question is whether Congress will be called upon to bail out other pension plans, and whether they’ll feel moved to do so. The website Politico pointed out that pension fund for unionized binders of catalogs, books and magazines is set to run dry this year, and the Central States Teamsters Plan could be broke by the midpoint of this decade. As of a year ago, the plan’s shortfall was in the neighborhood of $50 billion.
Americans have mostly been left to fend for themselves when it comes to their retirement, and multiple studies have shown that most of us are not saving nearly enough to keep us through our golden years. That being the case, the prospect of using taxpayer dollars to help finance the retirements of other people might rub some the wrong way. But a promise was made to miners that they would be cared for in their retirement. Without intervention from Washington, D.C., that promise would almost certainly have gone unfulfilled. That kind of failure is something no one should have been willing to accept.