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1 1 (March 15, 2017)

handle is hein.crs/govcfus0001 and id is 1 raw text is: &~ ~ riE SE .$rCh &~ ~ ~ March 15, 2017 Pension Benefits for United Mine Workers of America Retirees The United Mine Workers of America (UMWA) is a labor union that primarily represents coal mine workers. Eligible UMWA members receive post-retirement health and pension benefits from one of three multiemployer health benefit plans and one multiemployer pension plan. A multiemployer plan is sponsored by employers in the same industry and is maintained as part of a collective bargaining agreement. This In Focus only concerns pension benefits. For health benefits information, see CRS In Focus IF10616, Health Benefits for United Mine Workers ofAmerica Retirees. U .WA'VA Pe,,io,, Bei. Eligible retired UMWA mine workers receive pension benefits from the UMWA 1974 Pension Plan and Trust (1974 Plan). The 1974 Plan is a multiemployer defined benefit (DB) pension plan. In multiemployer DB plans, participants typically receive a monthly payment in retirement that is based on a formula that uses the length of service and a benefit rate. For example, the monthly benefit in retirement might be $40 per year of service. An individual with 30 years of service would receive a monthly benefit of $40x30 = $1,200 per month or $14,400 per year. Multiemployer pension plans pool risk to minimize financial strain if one or more employers withdraw from the plan. However, in recent years, an increasing number of employers have left multiemployer pension plans, either voluntarily or through employer bankruptcy. As a result of employer withdrawals and declines in the value of plan assets, there are insufficient funds in the plan from which to pay all of the benefits promised to participants. The trustees of the 1974 Plan estimate that it will become insolvent in 2025 or 2026. Table 1 summarizes information about the 1974 Plan in the 2014 plan year (the most recent information available). Table I. United Mine Workers of America 1974 Pension Plan and Trust (2014 plan year information) 1974 Pension Plan Active Participants Retired Participants and Beneficiaries Receiving Payments Terminated Vested Participants Number of Employers Obligated to Contribute to Plan Benefit Payments Employer Contributions 9,218 90,754 6,676 44 $618.5 million $97.1 million 1974 Pension Plan Plan Assets (Current Value) Plan Assets (Actuarial Value) Plan Liabilities (under immediate gain and unit cost methods) Plan Liabilities (under RPA '94 method) Plan Underfunding (Assets - Liabilities) Using Actuarial Values of Assets and Immediate Gain Value of Liabilities Funding Ratio (Assets/Liabilities) Using Actuarial Values of Assets and Liabilities Plan Underfunding (Assets - Liabilities) Using Current Value of Assets and RPA '94 Liabilities Funding Ratio (Assets/Liabilities) Using Current Value of Assets and RPA '94 Liabilities Number of Participants on Whose Behalf No Contributions Were Made $4,165.0 million $4,362.5 million $6,153.2 million $9,734.7 million $1,790.7 million 70.9% $5,569.7 million 42.8% 46,537 Source: CRS analysis of the plan's Form 5500, available via search on the Employee Benefits Security Administration (EBSA) webpage, at https://www.efast.dol.gov/portal/app/disseminate?execution=e I s I. Notes: The 2014 plan year ran from July I, 2014, to June 30, 2015, for the 1974 Pension Plan. Multiple values of plan assets and plan liabilities occur because pension plans are required to calculate their values using several methods. The Pension Benefit Guaranty Corporation (PBGC) is a federal government agency created by the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93- 406) to protect the benefits of participants in private-sector DB pension plans. When a multiemployer DB pension plan becomes insolvent and is unable to continue to pay participants their promised benefits, PBGC provides financial assistance in the form of loans (which are not expected to be repaid) made to multiemployer DB plans. As a condition for the loans, plans must reduce participants' benefits to a statutory maximum benefit. Since 2001, the statutory annual maximum benefit has been $12,870 for an individual who participated in a plan for 30 years. The benefit is lower for individuals with fewer than 30 years of service in the plan. .O 'T gognpo 'pop\\m ggmm g 'S a X

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