Analysis of the Administration's Proposal to Ensure Solvency of the United Mine Workers of America Combined Benefit Fund Page: 1 of 48
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Accountability * Integrity * Reliability
United States General Accounting Office Accounting and Information
Washington, DC 20548 Management Division
August 15, 2000
The Honorable William V. Roth, Jr.
Chairman, Committee on Finance
United States Senate
Subject: Analysis of the Administration's Proposal to Ensure Solvency of the United
Mine Workers of America Combined Benefit Fund
Dear Mr. Chairman:
In your March 9, 2000, letter you asked us to review the administration's proposal to
ensure the solvency of the United Mine Workers of America (UMWA) Combined
Benefit Fund. Specifically, you asked that we analyze the impact of the
administration's proposal to (1) extend the Abandoned Mine Land Reclamation
(AML) fees, (2) reverse the effects of National Coal v. Chater (National Coal),
(3) reverse the effects of Dixie Fuel Companyv. Social Security Administration
(Dixie Fuel), and (4) appropriate federal funds. In addition, you asked that we
provide some general background information on the operations, governance
structure, benefit structure, and historical and projected financial position of the
As you know, in 1992, more than 100,000 UMWA retirees and their dependents were
in danger of losing their health benefits. The Congress responded by enacting the
Coal Industry Retiree Health Benefit Act (P.L. 102-486), which established the
Combined Benefit Fund (Fund') to pay these health benefits. More 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. In November
1999, the Congress responded to the Fund's financial difficulties by appropriating to
the Fund $68 million in interest from the AML Fund in the Consolidated
Appropriations Act for Fiscal Year 2000 (P.L. 106-113).
To provide the information you requested and address your specific questions, we
(1) interviewed fund officials and other affected parties, (2) examined applicable
statutes and regulations, and (3) reviewed the Fund's audited financial statements
and actuarial projections. We did not independently verify underlying data or
'The Fund is a multi-employer plan as defined by the Financial Accounting Standards Board in
Financial Accounting Standard (FAS) 106 and has annual audits by independent auditors, which
include actuarial projections of the Fund's unfunded liability.
GAO/AIMD-00-267R United Mine Workers of America
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United States. General Accounting Office. Analysis of the Administration's Proposal to Ensure Solvency of the United Mine Workers of America Combined Benefit Fund, text, August 15, 2000; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc296947/m1/1/: accessed November 15, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.