Miners’ pension plan asks Supreme Court to intervene in $115 million dispute

The United Mine Workers of America 1974 pension plan asked the U.S. Supreme Court to settle a $115 million dispute involving an employer’s withdrawal from a multi-employer plan.

The dispute centers on the decision of Energy West Mining Co. withdraw from UMWA’s multi-employer retirement plan jointly run by the union and the Bituminous Coal Operators Association Inc. duty.

The arbitrator upheld the pension plan actuary’s calculation of $115 million. Energy West sued, but the US District Court in Washington ruled in May 2020 that the plan’s actuarial assumptions and calculations were reasonable in accordance with ERISA’s recommendations.

Energy West is a subsidiary of the utility company PacifiCorp. She pulled out of the union’s pension plan in 2015 after closing her coal mine in Huntington, Utah, according to court documents.

Energy West filed an appeal, and the U.S. Circuit Court of Appeals for the District of Columbia overturned the lower court’s decision in July 2022.

“In order to calculate Energy West’s obligation to exit the pension plan, the actuary had to base his assumptions on the actual characteristics of the plan,” the three-judge panel of the appeals court wrote. “Because the actuary did not do so, we set aside the district court’s decision and revert the decision to set aside the arbitration award… When the actuary calculates Energy West’s withdrawal obligation, the discount rate assumption should be similar, but not necessarily identical, to the discount rate assumption used to calculate the minimum funding.

On February 3, the UMWA Pension Plan asked the Supreme Court to reverse the appeals court’s decision.

“To prevent a protracted exit dispute, Congress has shielded actuaries from dubious speculation,” the pension plan’s petition reads.

“As this court noted, in interpreting the statutory presumption of correctness and defending it against attacks by due process,” federal law governing multi-employer pension plans “yields to the actuarial profession, treats that profession’s views of acceptable standards as binding, and gives actuaries the opportunity to use their professional judgment within the framework of these accepted actuarial standards,” the petition reads.

Because different appellate courts have made different rulings on the calculation of liability for exiting pension plans for multiple employers, the Miners’ plan says the Supreme Court should set a clear standard. “Target conflicts under the law governing discount rates are therefore perhaps the most important conflicts affecting liability for withdrawals,” the petition reads.

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