Energy West Mining Co., Huntington, Utah, must pay a withdrawal liability totaling $115 million to the United Mine Workers of America 1974 Pension Plan, Washington, a U.S. District Court judge recently ruled.
Judge Carl J. Nichols of the U.S. District Court in Washington ruled May 22 that the pension plan's actuarial assumptions and methods calculating Energy West's withdrawal liability were reasonable under the provisions of the Employee Retirement Income Security Act of 1974.
Energy West, a subsidiary of utility company PacifiCorp, withdrew from the $3.1 billion union pension plan in 2015 after closing its coal mine in Huntington, according to the court filing.
The withdrawal liability from the multiemployer pension plan required the company to pay remaining vested benefits to Energy West's union participants.
When the pension plan calculated the liability at $115 million, Energy West took the plan to arbitration arguing the discount rate used to calculate the liability overstated the plan's unfunded vested liabilities due to the plan's projected insolvency in 2022, according to the filing.
Mr. Nichols ruled the plan's calculations were reasonable.
The Bipartisan American Miners Act of 2019 was signed into law in December. The law approved the transfer of funds from the Interior Department's Abandoned Mine Land fund to help cover the pension benefit obligations of the pension plan, which had at least $3 billion in unfunded liabilities.
Officials at Energy West and the pension plan could not be immediately reached for comment.