The proverbial canary in the coal mine was a hapless little bird tasked to provide warning of dangerous gas by dying. Greater love hath no bird …

It is not without irony, then, that the metaphorical canary warning of danger in America’s massively overstressed labyrinth of pension systems should be the United Mine Workers of America.

Unsurprisingly, with shutdowns, layoffs and bankruptcies in the coal industry, the UMW pension fund is running out of money.

Whether you take the administration view that coal is an environmental evil and must be done away with or the more nuanced one that technology is simply passing it by, coal is not coming back.

There are currently some 120,000 retired miners receiving benefits with perhaps a tenth that many active miners supporting the plan. Failure is on the horizon.

Though the UMW plan is private, the union made a special deal with the government in 1946. In order to avoid a strike, the Truman administration agreed to guarantee lifetime pension benefits to UMW members. It probably seemed like a good idea at the time.

Congress has been dithering with a bailout bill for months. The senator blocking a vote is Mitch McConnell of Kentucky — you know, that state with a lot of coal mines.

Sen. McConnell has refused to comment on his reasoning, but he is known to be a vindictive sort, and the UMW was a big contributor to his last senatorial opponent.

Other coal country legislators from both parties are pushing the bill, which, they say, will not cost taxpayers anything because the money will come from a fund earmarked to clean up abandoned mines. Oh, well.

There are plenty of reasons to be sympathetic toward the miners. It is dangerous work. Their industry is vanishing through no fault of their own. Their union made a good deal in 1946. If the pension plan is not funded, many of them will move to welfare, which will cost taxpayers money anyway. I’m betting the UMW will win this one.

But there is unfortunately a lot more to this story.

Unfunded pension liabilities in this country have been estimated at over 100 trillion — that’s trillion — dollars, including local, state and federal accounts. Sen. Mike Enzi, chairman of the Senate Budget Committee, has said, “I’m not sure how Congress would help the United Mine Workers and not the others. Where do we draw the line?”

Where indeed?

If there was ever a compelling case to do away with defined-benefit pension plans, this is it. Many, if not most, of these plans have been actuarily abused for decades, as projected returns exceeded actual ones.

This has been particularly true of government-administered plans at all levels, as large pensions and early retirement were promised to make up for relatively low salaries, thereby pushing payment forward to the next generation of officials and taxpayers. The chickens, or perhaps the canaries, are coming home to roost.

Private industry has largely replaced defined-benefit plans with defined contribution ones — IRAs, 401ks and the like. Arguments are made that the end result is unpredictable, and so it is, but at least there will be an end result.

Individuals will just have to be responsible and save more, which, by the way, does not preclude employer contributions. People will have to learn something about personal finance and actually seek competent advice.

Welcome to reality. The alternative has proven to be expediently managed pools of money that run out at inopportune times.

This all represents a big change for future employees, and leaves many present ones in a hole they should have anticipated but did not.

Some will be bailed out by taxpayers; some will not. It will depend on the push and pull of politics and where the most votes lie. Pensioners and taxpayers alike will foot the bill; nobody will be happy; the economy will suffer.

Have we learned anything, or is there just another dead canary in the mineshaft?

Longtime columnist Fred Wolferman recently moved from Southern Pines back to his native Kansas City. Contact him by email at

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