PBGC, Anthracite Plan, UMWA Agreement Increases Retiree Pension Benefits
FOR IMMEDIATE RELEASE
December 30, 1997
The Pension Benefit Guaranty Corporation (PBGC) today announced an agreement with the United Mine Workers of America and the Anthracite Fund under which some 4,500 coal miners and beneficiaries will receive supplemental pension benefits. In January, the Fund will repay $3.1 million of financial assistance provided by PBGC in the 1980s to enable the Fund to pay benefits during temporary periods of insolvency.
"This announcement will help make the holidays a bit brighter for the retired coal miners and their families. This is an agreement that helps restore the pension benefits that these coal miners have worked hard and long to earn," said Labor Secretary Alexis M. Herman, Chairman of the PBGC Board of Directors.
Under the agreement, the Anthracite Health and Welfare Fund and Pension Plan of Hazleton, Pennsylvania, a multiemployer pension plan, will supplement monthly benefits to retired coal miners and beneficiaries by an additional $60 per month, bringing monthly payment from $30 to $90. "As it is important to the United Mine Workers of America for its members to receive a fair wage while they are working, it is also essential that our retirees can enjoy a decent retirement after their years of laboring in the nation's mines. The UMWA is pleased to contribute to this settlement so that our brothers and sisters in the Anthracite Region will finally have their pension benefits partially restored," said Cecil Roberts, President of the International Union, United Mine Workers of America.
The plan first required financial assistance from PBGC in 1981 when employer contributions to the plan were suspended as a result of an industry strike. Additional assistance was provided through 1989.
The plan also received loans totaling nearly $6 million from the United Mine Workers to help pay benefits during the 1970s. The UMWA is forgiving its loan in consideration of the higher benefits paid to retired coal miners and beneficiaries.
"This a win, win situation for all involved. The plan is back on its feet and should be able remain there without further assistance, the plan's debt will be satisfied, the employers will not have to increase their contributions and, most important, the retired workers will have increased benefits," said PBGC Executive Director David M. Strauss.
The agreement has been fashioned in such a manner that additional contributions will not be required from the participating employers.
Under PBGC's multiemployer insurance program, the agency provides financial assistance through loans to plans that are unable to pay basic benefits when due. The triggering event for PBGC action is plan insolvency. This is in contrast to PBGC's single-employer program. PBGC takes over and becomes trustee of an insolvent single-employer plan when the sponsoring company can no longer stay in business and support the plan.
Since 1980, PBGC has provided approximately $33 million in assistance to 16 of the 2,000 multiemployer plans it insures. The Anthracite Fund is the first to repay PBGC's financial assistance loan.
A multiemployer plan is a collectively bargained pension arrangement involving more than one unrelated employer, usually in a common industry, such as construction, trucking textiles, and coal mining. A single-employer plan, which also may be collectively bargained, provides benefits for employees of one employer only; or it may be one that provides benefits to employees of several employers, but is not collectively bargained.
PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits earned by some 42 million American workers and retirees participating in about 50,000 private-sector defined benefit pension plans (single-employer and multiemployer). The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 98-10