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AIMD-00-280R 1 (2000-08-15)

handle is hein.gao/gaobaalky0001 and id is 1 raw text is: I .GAO Accountability * Integrity * Reliability United States General Accounting Office Accounting and Information Washington, DC 20548 Management Division B-285020 August 15, 2000 The Honorable Don Nickles Assistant Majority Leader United States Senate Subject: Financial and Legal Issues Facing the United Mine Workers of America Combined Benefit Fund Dear Senator Nickles: In your January 24, 2000 letter, you asked us to review the United Mine Workers of America (UMWA) Combined Benefit Fund (the Fund).' As part of your request, you asked that we provide information on (1) the status of the Fund's financial position and its financing mechanism, (2) the impact of major court decisions on the assignment of beneficiaries, and (3) significant litigation and its related costs. In addition, you asked that we provide some general background information on the governance structure, operations, and benefit structure of the Fund. As you know, in 1992, more than 100,000 UMWA retirees and their dependents were in danger of losing their health benefits. The Congress responded by enacting the Coal Industry Retiree Health Benefit Act (P.L. 102-486), which established the Combined Benefit Fund to pay these health benefits. More recently, the Fund has been experiencing financial difficulties due to rising costs and a financing mechanism that has been negatively affected by recent court decisions. In November 1999, the Congress responded to the Fund's financial difficulties by appropriating to the Fund $68 million in interest from the Abandoned Mine Land Reclamation Fund in the Consolidated Appropriations Act for Fiscal Year 2000 (P.L. 106-113). To provide the information you requested and address your specific questions, we (1) interviewed fund officials and other affected parties, (2) examined applicable statutes and regulations, (3) reviewed the Fund's audited financial statements and actuarial projections, and (4) obtained and reviewed information from Fund officials on the Fund's significant litigation and its associated costs. We did not independently verify underlying data or compute actuarial projections. As part of our work, we 'The Fund is a multi-employer plan as defined by the Financial Accounting Standards Board in Financial Accounting Standard (FAS) 106 and is audited annually by independent auditors, which include actuarial projections of the Fund's unfunded liability. GAO/AIMD-00-280R United Mine Workers of America

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