US Senators Introduce Miner Pension Rescue Bill

Three US Senators have introduced legislation to secure pensions for retired miners by amending the Surface Mining Control and Reclamation Act of 1977 and the Coal Act to include 2018 and 2019 bankruptcies in the miners’ healthcare fix that passed in 2017.

The bill is intended to secure the pensions of 92,000 coal miners and to protect healthcare benefits for 13,000 miners.

The Bipartisan American Miners Act of 2019 transfers certain funds to provide pension and health benefits for retired coal miners who have been affected by coal company bankruptcies. It was introduced by three US senators: Democrat Joe Manchin of West Virginia and Republicans Mitch McConnell of Kentucky and Shelley Moore Capito of West Virginia. McConnell is the powerful Senate majority leader.

“Year after year, our coal miners risked their lives to bring America the energy needed to become the world leader we are today,” Senator Manchin said in a release. “Our coal miners made a commitment to our country, and now it is our turn to uphold the commitment we made to them in 1946 by securing their hard-earned pensions and healthcare.”

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The Department of the Treasury would transfer additional funds to the 1974 United Mine Workers of America (UMWA) Pension Plan to pay pension benefits, the bill would provide. This would occur if the annual limit on transfers under the Surface Mining Control and Reclamation Act of 1977 exceeds the amount required to be transferred for existing obligations of the Abandoned Mine Reclamation Fund. The bill would also increase the annual limit on transfers to $750 million from $490 million.

The bill also adds miners affected by 2018 coal company bankruptcies to the group whose retiree health benefits are used in determining the amount that the Treasury must transfer under current law to the Multiemployer Health Benefit Plan.

It allows in-service distributions under a pension plan or governmental section 457(b) plan at age 59 ½, down from age 62, and extends and increases the Black Lung Disability Trust Fund excise tax.

“This is a permanent remedy for the pension and health care dilemma miners across Appalachia have unfairly had to face,” Senator Capito said. “Our miners worked for these pensions.”

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Tags: Bill, Bipartisan American Miners Act of 2019, coal miners, Joe Manchin, Legislation, Mitch McConnell, Pension, Shelley Moore Capito

Canada’s largest pension fund is not letting go of its investments in oil and gas, as well as renewables, anytime soon. The Canada Pension Plan Investment Board (CPPIB) CEO, Mark Machin, said in an interview with BNN Bloomberg in Toronto last week that the sector, including pipelines and other resources, are appropriate for the fund’s portfolio.

“We will look at traditional oil and gas, whether it’s pipelines or other resources,” said Manchin, referring to renewables. “As long as we can understand all the risks behind the investment, that the regulation may change, that preference may change, that geography may change. If we can understand those and can still be compensated sufficiently, then we’ll continue to make that investment.”

The program is still committed to renewables. The fund, which has a value of about $300 billion, acquired North American wind farm operator Pattern Energy last week for $6.1 billion. Shares cost $26.75 per share for a total of $2.6 billion. The remainder covered the company’s debts. Pattern has built 28 renewable energy projects in the US, Canada, and Japan. The investment is one of the largest M&A deals in US renewables.

In relative terms, though, energy, whether green or not, is not a huge chunk of CPPIB’s portfolio. The fund is invested in more than 20 energy companies ranging from pipeline companies to renewables. As of March 30, the end of its most recent fiscal year, just 1.6% of the fund’s portfolio was invested in the traditional energy sector, and 1% in a category called “power and renewables.”

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Manchin’s remarks follow a setback for the Canadian energy industry. Last week, legacy energy firm Encana announced plans to move its corporate headquarters to Denver, and drop references to Canada in its branding. Pipeline shortages, Canadian anti-oil sentiment, and the availability of capital in the US are reasons for the relocation.

The Pattern Energy deal demonstrates the delicate balance Machin is striking between reaping the rewards of oil and gas revenue and acknowledging the “multi-faceted” and “very complicated risk” of climate change, including public outrage over fossil fuel investments.

“It’s important as an investor that we understand all of those risks and how fast the energy transition is going to happen,” he said. “When we look at every investment, we understand all the risks that climate change could present…We are able to understand the risks in a more granular way now because of some of the tools and the disclosure practices that have really improved.”

Manchin is referring in part to the Financial Stability Board’s Task Force on climate-related disclosures that have pushed companies to provide more information, data, and metrics for funds like CPPIB to make investment decisions. (The CPPIB is one of two global pension fund managers on the board.) In April, the fund launched a framework for teams to evaluate climate change-related risks and opportunities. About 4% of the fund is invested in traditional and renewable energy.

The Canadian fund is stopping short of joining the throngs of investors lining up for the Aramco initial public offering. Saudi Arabia is taking its giant oil company public amid great fanfare and international investor interest.

“We are not invested in the Middle East. We want to invest in markets where we’re going to do a lot of different things,” he said, adding that the fund wants to invest in infrastructure, real estate, public and private markets, credit, and equity. The fund is invested in North America, the UK, and Europe, and in emerging markets in Latin America and Asia.

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Tags: CPPIB, Mark Machin, oil and gas, Renewables, Saudi Arabia