Tuesday, January 22, 2013

Many coal miners retire, pressuring pension plans

The exodus of underground coal miners who started working 40 years ago is putting more stress on an already strained coal industry, Erich Schwartzel of the Pittsburgh Post-Gazette reports. "Hiring trends that date back to the Nixon administration have resulted in a disproportionate number of older workers in mines across Pennsylvania and the rest of the nation," the paper reports. Older miners are leaving in droves, and experts say this is hitting the industry when it's in a state of flux because of decreased demand.

The large number of older miners has also "strained weak pension plans at major companies, appearing on balance sheets and in bankruptcy filings as a hazardous expense," the Post-Gazette reports. As much as 75 percent of the coal-mining workforce has retired in Pennsylvania, leaving companies to fill big gaps. "The retirement of older workers is especially acute in Appalachia," the paper reports, with three of the region's states in the top five coal-producers. The average coal miner has already been working more than 20 years and is 45 or older.

Pensions and other post-retirement benefits have started to affect company bottom lines. According to its most recent earning report, such benefits cost Alpha Natural Resources more than $1.18 billion in the third quarter. The two largest coal companies in the U.S., Peabody Energy and Arch Coal, are embroiled in a lawsuit over their lack of payment of benefits to United Mine Workers of America retirees, who claim the company offloaded benefits onto off-shoot companies, then had those off-shoots file for bankruptcy to avoid paying out benefits. (Read more)

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