"Look, I'll pay you less today and for the rest of your life in exchange for 30 years from now giving you a decent retirement pension. Except I have no idea if our company will be solvent in five years, let alone thirty, and even then I can not pay into the retirement fund and just declare bankruptcy when it comes time to start paying out."
This is why we have Social Security.
As coal industry declines, what will happen to all those retired miners?
But there’s another aspect to the decline of coal that’s getting less attention — namely, what will happen to the hundreds of thousands of currently retired coal miners who still rely on these companies for pensions and health benefits? Many of these retirees, after all, have crippling ailments after years of working in the mines. And many of the union benefits they’ve amassed over the decades are now at risk of vanishing.
There are a few big issues here: First, the United Mineworkers of America’s pension plan, which was established in 1974 and covers more than 100,000 retired miners, is seriously underfunded. That’s partly because of losses from the recent financial crisis and partly because contributions are dwindling — as time passes, there are fewer and fewer mining companies left to chip in to the multi-employer plan.
Second, a controversial bankruptcy case is putting thousands of retirees’ health benefits at risk. Back in 2007 and 2008, two of the largest U.S. mining companies, Peabody Energy and Arch Coal, spun off the majority of their unionized mines and retirees into a brand-new company, Patriot Coal. A few years later, Patriot fell victim to plummeting coal prices and declared bankruptcy. Some 12,000 retired miners and their dependents now face the loss of some or all of their health benefits.