Financial and Legal Issues Facing the United Mine Workers of America Combined Benefit Fund
Abstract
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. According to the Fund's September 30,1999, audited financial statements, the Fund had a cumulative deficit of $12.2 million. The Fund's actuary estimates that the cumulative operating deficit will increase to approximately $513 million by 2008. In addition, the actuarial projection includes borrowing costs of $101 million during the same time frame, which results in a total deficit of $614 million. The Fund is involved in extensive litigation arising from the Coal Act and normal business operations. Fund officials classified their significant litigation into seven major categories: (1) constitutional cases, (2) Dixie Fuel court cases, (3) companies challenging assessments, (4) premium rate cases, (5) bankruptcy cases, (6) successorship cases, and (7) Evergreen cases. Eastern Enterprises. Apfel (1998) and Dixie Fuel Company v. Social Security Administration (1999) are two of the significant cases that have affected or may affect the assignment of beneficiaries. Eastern resulted in approximately 8,000 beneficiary reassignments. Dixie Fuel, which has not yet been implemented, could potentially result in the reassignment of 10,000 beneficiaries. The Fund has incurred legal costs of over $11 million for all significant cases since its inception.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 2000
- Accession Number
- ADA380788
Entities
Organizations
- United States Government Accountability Office