Charleston, W.Va. -- After Wednesday's federal bankruptcy court ruling that allows Patriot Coal to cut health care and retirements benefits for miners and retirees, Rep. Nick J. Rahall, D-W.Va., asked Congress to pass the Coalfield Accountability and Retired Employee Act to protect those benefits.Earlier this year, Rahall and Sen. Jay Rockefeller, D-W.Va., introduced the CARE Act in the House of Representatives and the Senate.U.S. Bankruptcy Judge Kathy A. Surratt-States ruled Wednesday that Patriot Coal, which filed for bankruptcy in July 2012, could throw out contracts negotiated with the United Mine Workers of America.The UMWA argued Patriot was created in 2007 to hire workers at union mines previously run by Peabody Energy and Arch Coal. Patriot also assumed health care costs for union miners who had already retired from those companies.Rahall said, "Our coal miners earned, through sweat and sacrifice, the retirement and health care benefits they were promised. That is why yesterday's court ruling, which puts those benefits at risk for tens of thousands of Appalachian mining families, is so disappointing."Rahall said it is "imperative" that Congress pass the CARE Act, which he said would:Make any retirees who lose benefits after the bankruptcy of their companies eligible for the 1992 Benefit Plan, which was established under the Coal Act to provide health benefits to retired and disabled miners and their families.Amend the Surface Mining Control and Reclamation Act of 1977 to transfer excess money in the Abandoned Mine Land fund to the UMWA 1974 Pension Plan, in order to prevent it from becoming insolvent.
Provide that employer contributions to any pension funds are given the same tax-exempt treatment as corporate contributions to other pension plans. State Senate President Jeff Kessler, D-Marshall, said Thursday he was deeply disappointed with the Surratt-States ruling allowing Patriot Coal to back out of its contract with the UMWA."This ruling will have a devastating effect on thousands of hard working West Virginians," Kessler said. "I am saddened to see how these men and women are being treated after giving so much of their lives to the company."Kessler hopes the bankruptcy ruling will be overturned in the appeal the UMWA filed in U.S. District Court on Wednesday, shortly after Surratt-States released her ruling.When Rahall introduced the CARE Act earlier this year, he also mentioned the danger that the UMWA's 1974 Pension Plan could become insolvent, largely because of the growing number of retired miners, compared to working miners. Thousands of retired coal miners, including nearly 40,000 in West Virginia, could face loss, or significant reduction, of their health care and retirement benefits."At present, there are only about 10,000 active mineworkers supporting pension payments for nearly 95,000 retirees," Rahall said.
"This severe underfunding of the UMWA's 1974 pension plan, coupled with the stress the fund is experiencing as a result of the recent financial crisis, has placed it on a path to insolvency," Rahall said. The 1974 Pension Plan provides benefits to retired miners who worked for companies that went out of existence or declared bankruptcy. Rahall said Patriot's bankruptcy could add an additional 12,000 retired miners to the 1974 Pension Plan.