ST. LOUIS, Mo. — A U.S. bankruptcy judge has approved the settlement agreement on wages and benefits that came out of months of tough negotiations between Patriot Coal and the United Mine Workers of America.
U.S. Bankruptcy Judge Kathy Surratt-States signed off on the deal Tuesday after UMWA members overwhelmingly approved it last week. It replaces a court ordered benefit package that took effect on July 1.
This new agreement does the following:
*Restores all but $1.00 per hour in wage cuts that were as high as $7.53 per hour for some job classifications
*Adds a $0.50 per hour annual wage increase beginning New Year’s Day 2015
*Keeps Patriot in the UMWA 1974 Pension Fund, meaning there will be no effect on pension benefits for current retirees, and current active members will continue to earn pension credit
*Eliminates monthly premiums for health care benefits
*Reduces the annual out-of-pocket maximum for health care benefits by 60 percent, from $4,000 to $1,600
*Restores life insurance benefits, vision care benefits, dental insurance and Accidental Death and Dismemberment insurance
*Creates a Voluntary Employee Benefit Association (VEBA) as the mechanism for paying retiree health care benefits going forward.
In addition, Patriot gave the UMWA a more than 35 percent stake in the company as part of the settlement.
Patriot officials said the agreement will save the company $130 million each year for the next several years.