Coal Companies Eliminate Pensions
By A couple of months ago, I noted how coal giant Peabody Coal had created a spinoff corporation called Patriot Coal with the explicit mission of sending it toward bankruptcy in order to eliminate 20,000 pensions.
A Missouri bankruptcy judge has ruled in favor of Patriot here. Mike Elk with more:
Unless the parties come to another agreement, the ruling means that Patriot Coal’s healthcare obligations will be turned over to the Voluntary Employees Benefits Association (VEBA), a fund that would be administered by the union. According to the UMWA, Patriot will only guarantee to pay in a total of $15 million, plus $0.20 per ton of coal mined, which the UMWA calculates will cover only $5 million a year in retiree benefits. Retiree healthcare for Patriot Coal’s 20,000 beneficiaries currently costs $7 million a month, the union says.
According to the UMWA, Patriot Coal has offered the union a 35 percent stake in the company that the union can choose to sell in order to better fund the VEBA. The union, however, says that “since the current and future value of the company is unknown, there is no way of knowing how much money this could provide for healthcare benefits or when such funding would be available.” The company has also proposed a profit-sharing mechanism to help fund VEBA, the UMWA says, but it estimates the plan would provide only an additional $2 million a year.
Basically, another judge has conspired with corporate America to send thousands of old people into poverty.