Pension Benefits for United Mine Workers of America Retirees
link to page 1 link to page 2 
March 15, 2017
Pension Benefits for United Mine Workers of America Retirees
The United Mine Workers of America (UMWA) is a labor
1974 Pension Plan
union that primarily represents coal mine workers. Eligible
UMWA members receive post-retirement health and
Plan Assets (Current Value)
$4,165.0 million
pension benefits from one of three multiemployer health
benefit plans and one multiemployer pension plan. A
Plan Assets (Actuarial Value)
$4,362.5 million
multiemployer plan is sponsored by employers in the same
Plan Liabilities (under immediate gain
industry and is maintained as part of a collective bargaining
$6,153.2 million
and unit cost methods)
agreement. This In Focus only concerns pension benefits.
For health benefits information, see CRS In Focus IF10616,
Plan Liabilities (under “RPA ‘94”
$9,734.7 million
Health Benefits for United Mine Workers of America
method)
Retirees.
Plan Underfunding (Assets -
UMWA Pension Benefits
Liabilities) Using Actuarial
$1,790.7 million
Values of Assets and Immediate
Eligible retired UMWA mine workers receive pension
Gain Value of Liabilities
benefits from the UMWA 1974 Pension Plan and Trust
(1974 Plan). The 1974 Plan is a multiemployer defined
Funding Ratio (Assets/Liabilities)
benefit (DB) pension plan. In multiemployer DB plans,
Using Actuarial Values of Assets and
70.9%
participants typically receive a monthly payment in
Liabilities
retirement that is based on a formula that uses the length of
Plan Underfunding (Assets -
service and a benefit rate. For example, the monthly benefit
Liabilities) Using Current Value of
$5,569.7 million
in retirement might be $40 per year of service. An
Assets and RPA ’94 Liabilities
individual with 30 years of service would receive a monthly
benefit of $40x30 = $1,200 per month or $14,400 per year.
Funding Ratio (Assets/Liabilities)
Using Current Value of Assets and
42.8%
Multiemployer pension plans pool risk to minimize
RPA ’94 Liabilities
financial strain if one or more employers withdraw from the
Number of Participants on Whose
plan. However, in recent years, an increasing number of
46,537
Behalf No Contributions Were Made
employers have left multiemployer pension plans, either
voluntarily or through employer bankruptcy. As a result of
Source: CRS analysis of the plan’s Form 5500, available via search on
employer withdrawals and declines in the value of plan
the Employee Benefits Security Administration (EBSA) webpage, at
assets, there are insufficient funds in the plan from which to
https://www.efast.dol.gov/portal/app/disseminate?execution=e1s1.
pay all of the benefits promised to participants. The trustees
of the 1974 Plan estimate that it will become insolvent in
Notes: The 2014 plan year ran from July 1, 2014, to June 30, 2015,
2025 or 2026.
for the 1974 Pension Plan. Multiple values of plan assets and plan
liabilities occur because pension plans are required to calculate their
Table 1 summarizes information about the 1974 Plan in the
values using several methods.
2014 plan year (the most recent information available).
Role of the Pension Benefit Guaranty
Table 1. United Mine Workers of America 1974
Corporation
Pension Plan and Trust
The Pension Benefit Guaranty Corporation (PBGC) is a
(2014 plan year information)
federal government agency created by the Employee
Retirement Income Security Act of 1974 (ERISA; P.L. 93-
1974 Pension Plan
406) to protect the benefits of participants in private-sector
DB pension plans. When a multiemployer DB pension plan
Active Participants
9,218
becomes insolvent and is unable to continue to pay
Retired Participants and Beneficiaries
participants their promised benefits, PBGC provides
90,754
Receiving Payments
financial assistance in the form of loans (which are not
expected to be repaid) made to multiemployer DB plans. As
Terminated Vested Participants
6,676
a condition for the loans, plans must reduce participants’
benefits to a statutory maximum benefit. Since 2001, the
Number of Employers Obligated to
44
statutory annual maximum benefit has been $12,870 for an
Contribute to Plan
individual who participated in a plan for 30 years. The
Benefit Payments
$618.5 million
benefit is lower for individuals with fewer than 30 years of
service in the plan.
Employer Contributions
$97.1 million
https://crsreports.congress.gov
link to page 2 Pension Benefits for United Mine Workers of America Retirees
Table 2 provides FY2016 financial information on PBGC’s
example, if only a small number of participants’ benefit
multiemployer insurance program.
amounts are higher than PBGC guarantee benefit levels,
then the plan would not be able to reduce benefit levels by
Table 2. Selected FY2016 Data for Pension Benefit
amounts sufficient to avoid insolvency. The average benefit
Guaranty Corporation (PBGC) Multiemployer
payment in 2014 was about $6,900 per year.
Insurance Program
(in billions of dollars)
The 1974 Plan might be a candidate for a partition. Former
PBGC Director Joshua Gotbaum said that “absent
Premium Revenue
$0.282
legislation, the UMWA plan would clearly be a candidate
Investment Income
$0.143
for partition.” In a partition, PBGC gives approval to divide
a plan that meets specified criteria into two plans. The
Financial Assistance Paid
$0.113
partition’s goal is to restore the original plan to financial
health by relieving the plan of some of the benefit
Total Assets
$2.2
obligations to participants whose employers no longer
Total Liabilities (Expected Future Financial
$61.0
contribute to the plan.
Assistance)
Legislation Introduced in the 115th
Total Deficit (Assets – Liabilities)
$58.8
Congress That Would Provide Federal
Source: PBGC FY2016 Annual Report.
Financial Assistance to UMWA Plans
In the 115th Congress, legislation has been introduced that
PBGC expects the funds in its multiemployer insurance
would provide federal financial assistance to the 1974 Plan.
program to be exhausted within 10 years: it indicated that
there is a more than 90% chance of insolvency by the end
H.R. 179, the Miners Protection Act of 2017, introduced by
of 2028, and a 98% chance of insolvency by 2035. If PBGC
Representative David McKinley, and S. 175, the Miners
becomes insolvent, no provisions in law provide U.S.
Protection Act of 2017, introduced by Senator Joe Manchin,
Treasury assistance. ERISA, referring to PBGC, states that
are similar bills that would, among other provisions,
“the United States is not liable for any obligation or liability
transfer funds from the General Fund of the U.S. Treasury
incurred by the corporation.” (See 29 U.S.C. 1302(g)(2).)
to the 1974 Plan. The amount to be transferred would be
any amount remaining within an annual cap of $490 million
The insolvency of the UMWA 1974 Pension Plan could
after funds are first transferred from the General Fund to
result in the insolvency of PBGC. For example, from July
three UMWA multiemployer health plans and to certified
1, 2014, through June 30, 2015, the UMWA 1974 Pension
states and tribes that have reclaimed their priority
Plan paid $618.5 million in benefits to plan participants. In
abandoned coal mining.
comparison, in FY2016, PBGC received $282.0 million in
premium revenue, paid $113.0 million in financial
S. 176, the HELP for Coal Miners Health Care Act of 2017,
assistance to 65 multiemployer plans, and had $2.2 billion
introduced by Senator Mitch McConnell, would expand
in assets. The annual financial assistance required for the
eligibility for one of the multiemployer health plans and
UMWA 1974 Pension Plan would likely be several times
authorize transfers of federal funds to the plan to pay for the
greater than the annual financial assistance PBGC currently
additional benefits. S. 176 would not authorize the transfer
provides and current premium revenue, although the exact
of federal funds to the UMWA 1974 Pension Plan and
amount would depend on a number of factors, including the
would not make any changes to the 1974 Plan.
total amount of benefit reductions for participants who
receive benefits greater than the maximum guarantee.
For Further Information
See the following for further information on these issues:
Multiemployer Pension Reform Act of
2014 and the 1974 Pension Plan
United Mine Workers of American 1974 Pension Plan
Summary Plan Description
The Multiemployer Pension Reform Act of 2014 (MPRA;
http://www.umwafunds.org/Pension-Survivor-
enacted as Division O in the Consolidated and Further
Health/Documents/2014_74PTSPD.pdf
Continuing Appropriations Act, P.L. 113-235) was enacted
to provide multiemployer DB pension plans with options to
PBGC MPRA Report
avoid insolvency. The two main options available to plans
https://www.pbgc.gov/documents/MPRA-Report.pdf
are (1) benefit reductions and (2) plan partitions. It is
possible that the 1974 Plan would not be approved to
John J. Topoleski, Analyst in Income Security
reduce participants’ benefits because benefit reductions
might be insufficient to prevent the plan’s insolvency. For
IF10617
https://crsreports.congress.gov
Pension Benefits for United Mine Workers of America Retirees
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10617 · VERSION 2 · NEW
March 15, 2017
Pension Benefits for United Mine Workers of America Retirees
The United Mine Workers of America (UMWA) is a labor
1974 Pension Plan
union that primarily represents coal mine workers. Eligible
UMWA members receive post-retirement health and
Plan Assets (Current Value)
$4,165.0 million
pension benefits from one of three multiemployer health
benefit plans and one multiemployer pension plan. A
Plan Assets (Actuarial Value)
$4,362.5 million
multiemployer plan is sponsored by employers in the same
Plan Liabilities (under immediate gain
industry and is maintained as part of a collective bargaining
$6,153.2 million
and unit cost methods)
agreement. This In Focus only concerns pension benefits.
For health benefits information, see CRS In Focus IF10616,
Plan Liabilities (under “RPA ‘94”
$9,734.7 million
Health Benefits for United Mine Workers of America
method)
Retirees.
Plan Underfunding (Assets -
UMWA Pension Benefits
Liabilities) Using Actuarial
$1,790.7 million
Values of Assets and Immediate
Eligible retired UMWA mine workers receive pension
Gain Value of Liabilities
benefits from the UMWA 1974 Pension Plan and Trust
(1974 Plan). The 1974 Plan is a multiemployer defined
Funding Ratio (Assets/Liabilities)
benefit (DB) pension plan. In multiemployer DB plans,
Using Actuarial Values of Assets and
70.9%
participants typically receive a monthly payment in
Liabilities
retirement that is based on a formula that uses the length of
Plan Underfunding (Assets -
service and a benefit rate. For example, the monthly benefit
Liabilities) Using Current Value of
$5,569.7 million
in retirement might be $40 per year of service. An
Assets and RPA ’94 Liabilities
individual with 30 years of service would receive a monthly
benefit of $40x30 = $1,200 per month or $14,400 per year.
Funding Ratio (Assets/Liabilities)
Using Current Value of Assets and
42.8%
Multiemployer pension plans pool risk to minimize
RPA ’94 Liabilities
financial strain if one or more employers withdraw from the
Number of Participants on Whose
plan. However, in recent years, an increasing number of
46,537
Behalf No Contributions Were Made
employers have left multiemployer pension plans, either
voluntarily or through employer bankruptcy. As a result of
Source: CRS analysis of the plan’s Form 5500, available via search on
employer withdrawals and declines in the value of plan
the Employee Benefits Security Administration (EBSA) webpage, at
assets, there are insufficient funds in the plan from which to
https://www.efast.dol.gov/portal/app/disseminate?execution=e1s1.
pay all of the benefits promised to participants. The trustees
of the 1974 Plan estimate that it will become insolvent in
Notes: The 2014 plan year ran from July 1, 2014, to June 30, 2015,
2025 or 2026.
for the 1974 Pension Plan. Multiple values of plan assets and plan
liabilities occur because pension plans are required to calculate their
Table 1 summarizes information about the 1974 Plan in the
values using several methods.
2014 plan year (the most recent information available).
Role of the Pension Benefit Guaranty
Table 1. United Mine Workers of America 1974
Corporation
Pension Plan and Trust
The Pension Benefit Guaranty Corporation (PBGC) is a
(2014 plan year information)
federal government agency created by the Employee
Retirement Income Security Act of 1974 (ERISA; P.L. 93-
1974 Pension Plan
406) to protect the benefits of participants in private-sector
DB pension plans. When a multiemployer DB pension plan
Active Participants
9,218
becomes insolvent and is unable to continue to pay
Retired Participants and Beneficiaries
participants their promised benefits, PBGC provides
90,754
Receiving Payments
financial assistance in the form of loans (which are not
expected to be repaid) made to multiemployer DB plans. As
Terminated Vested Participants
6,676
a condition for the loans, plans must reduce participants’
benefits to a statutory maximum benefit. Since 2001, the
Number of Employers Obligated to
44
statutory annual maximum benefit has been $12,870 for an
Contribute to Plan
individual who participated in a plan for 30 years. The
Benefit Payments
$618.5 million
benefit is lower for individuals with fewer than 30 years of
service in the plan.
Employer Contributions
$97.1 million
https://crsreports.congress.gov
link to page 2 Pension Benefits for United Mine Workers of America Retirees
Table 2 provides FY2016 financial information on PBGC’s
example, if only a small number of participants’ benefit
multiemployer insurance program.
amounts are higher than PBGC guarantee benefit levels,
then the plan would not be able to reduce benefit levels by
Table 2. Selected FY2016 Data for Pension Benefit
amounts sufficient to avoid insolvency. The average benefit
Guaranty Corporation (PBGC) Multiemployer
payment in 2014 was about $6,900 per year.
Insurance Program
(in billions of dollars)
The 1974 Plan might be a candidate for a partition. Former
PBGC Director Joshua Gotbaum said that “absent
Premium Revenue
$0.282
legislation, the UMWA plan would clearly be a candidate
Investment Income
$0.143
for partition.” In a partition, PBGC gives approval to divide
a plan that meets specified criteria into two plans. The
Financial Assistance Paid
$0.113
partition’s goal is to restore the original plan to financial
health by relieving the plan of some of the benefit
Total Assets
$2.2
obligations to participants whose employers no longer
Total Liabilities (Expected Future Financial
$61.0
contribute to the plan.
Assistance)
Legislation Introduced in the 115th
Total Deficit (Assets – Liabilities)
$58.8
Congress That Would Provide Federal
Source: PBGC FY2016 Annual Report.
Financial Assistance to UMWA Plans
In the 115th Congress, legislation has been introduced that
PBGC expects the funds in its multiemployer insurance
would provide federal financial assistance to the 1974 Plan.
program to be exhausted within 10 years: it indicated that
there is a more than 90% chance of insolvency by the end
H.R. 179, the Miners Protection Act of 2017, introduced by
of 2028, and a 98% chance of insolvency by 2035. If PBGC
Representative David McKinley, and S. 175, the Miners
becomes insolvent, no provisions in law provide U.S.
Protection Act of 2017, introduced by Senator Joe Manchin,
Treasury assistance. ERISA, referring to PBGC, states that
are similar bills that would, among other provisions,
“the United States is not liable for any obligation or liability
transfer funds from the General Fund of the U.S. Treasury
incurred by the corporation.” (See 29 U.S.C. 1302(g)(2).)
to the 1974 Plan. The amount to be transferred would be
any amount remaining within an annual cap of $490 million
The insolvency of the UMWA 1974 Pension Plan could
after funds are first transferred from the General Fund to
result in the insolvency of PBGC. For example, from July
three UMWA multiemployer health plans and to certified
1, 2014, through June 30, 2015, the UMWA 1974 Pension
states and tribes that have reclaimed their priority
Plan paid $618.5 million in benefits to plan participants. In
abandoned coal mining.
comparison, in FY2016, PBGC received $282.0 million in
premium revenue, paid $113.0 million in financial
S. 176, the HELP for Coal Miners Health Care Act of 2017,
assistance to 65 multiemployer plans, and had $2.2 billion
introduced by Senator Mitch McConnell, would expand
in assets. The annual financial assistance required for the
eligibility for one of the multiemployer health plans and
UMWA 1974 Pension Plan would likely be several times
authorize transfers of federal funds to the plan to pay for the
greater than the annual financial assistance PBGC currently
additional benefits. S. 176 would not authorize the transfer
provides and current premium revenue, although the exact
of federal funds to the UMWA 1974 Pension Plan and
amount would depend on a number of factors, including the
would not make any changes to the 1974 Plan.
total amount of benefit reductions for participants who
receive benefits greater than the maximum guarantee.
For Further Information
See the following for further information on these issues:
Multiemployer Pension Reform Act of
2014 and the 1974 Pension Plan
United Mine Workers of American 1974 Pension Plan
Summary Plan Description
The Multiemployer Pension Reform Act of 2014 (MPRA;
http://www.umwafunds.org/Pension-Survivor-
enacted as Division O in the Consolidated and Further
Health/Documents/2014_74PTSPD.pdf
Continuing Appropriations Act, P.L. 113-235) was enacted
to provide multiemployer DB pension plans with options to
PBGC MPRA Report
avoid insolvency. The two main options available to plans
https://www.pbgc.gov/documents/MPRA-Report.pdf
are (1) benefit reductions and (2) plan partitions. It is
possible that the 1974 Plan would not be approved to
John J. Topoleski, Analyst in Income Security
reduce participants’ benefits because benefit reductions
might be insufficient to prevent the plan’s insolvency. For
IF10617
https://crsreports.congress.gov
Pension Benefits for United Mine Workers of America Retirees
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10617 · VERSION 2 · NEW