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Donald J. Trump made coal miners a central metaphor of his presidential campaign, promising to “put our miners back to work” and look after their interests in a way that the Obama administration did not. Now, three months into his presidency, comes a test of that promise, the New York Times reported today. Unless Congress intervenes by late April, government-funded health benefits will abruptly lapse for more than 20,000 retired miners, concentrated in Trump states that include Pennsylvania, Ohio and West Virginia. Many of the miners have serious health problems arising from their years in the mines. Responsibility for the retirees’ health plans has increasingly shifted to the federal government in recent years, as struggling coal companies have shed their liabilities in bankruptcy court. Congress voted last fall to finance benefits for a large group of retirees for several months, but House and Senate Republican leaders have yet to agree on a longer-term solution.

American companies are trying to stop employees from raiding their 401(k)s, in an attempt to ensure that older workers can afford to retire and make room for younger, less-expensive hires, according to a Wall Street Journal analysis today. Employers of all types are taking steps to better inform workers of the financial implications of borrowing from their retirement accounts and pulling the money out when they leave jobs. Tapping or pocketing retirement funds early, known in the industry as leakage, threatens to reduce the wealth in U.S. retirement accounts by about 25 percent when the lost annual savings are compounded over 30 years, according to an analysis by economists at Boston College’s Center for Retirement Research.

ABI held a media webinar on Friday with experts examining the Supreme Court’s ruling in Czyzewski v. Jevic Holding Corp. Experts on the panel included Prof. Jonathan Lipson, who is Counsel of Record for an amicus brief from law professors in favor of the petitioner, David R. Kuney, Senior Counsel at Whiteford Taylor Preston LLP, who is the Counsel of Record for an amicus brief by another set of law professors in support of the respondents, and ABI Resident Scholar Prof. Andrew Dawson. The moderator will be ABI Editor-at-Large Bill Rochelle. To view a replay of the webinar, please click here. 

Reversing the Third Circuit in Czyzewski v. Jevic Holding Corp., the Supreme Court ruled 6-2 yesterday in an opinion by Justice Stephen G. Breyer that the bankruptcy court, without consent from affected parties, cannot approve so-called structured dismissals that “deviate from the basic priority rules,” not even in rare cases, according to a special analysis from ABI Editor-at-Large Bill Rochelle. Justice Breyer was careful to narrow the Court’s holding so the opinion would not be interpreted to preclude first-day wage or critical vendor orders. Joined by Justice Samuel A. Alito, Jr., Justice Clarence Thomas dissented, saying that the writ of certiorari should have been dismissed as improvidently granted. Read more. 

Additionally, Cliff White, Director of the Executive Office for U.S. Trustees, issued a statement praising the decision and appreciating the efforts of the U.S. Trustee Program in the litigation. “The Supreme Court ruled in favor of truck drivers whose employer fired them, went bankrupt the next day, and then denied them their right to priority payment under bankruptcy law,” White said. “The Supreme Court’s ruling is a victory for the faithful application of the Bankruptcy Code as Congress has written it. When the rules are clear and consistently applied by the courts, then the system works more fairly. In the long run, that benefits all stakeholders — debtors, creditors, and the American public.”

ABI will be holding a media webinar tomorrow at 10 a.m. ET with experts examining the decision. A limited number of spots are available for ABI members to participate in the hour-long program. If you are interested in participating, please register via the following link. 

San Francisco, where the unemployment rate is just 3.2 percent and the typical home sells for more than $1 million, is facing a budget shortfall that will reach $848 million in five years, Bloomberg News reported yesterday. Increases in pension payments and other payroll costs are driving the gap, according to a five-year financial plan, despite a measure voters approved in 2011 that aimed to cut employee-retirement bills. San Francisco officials, who will present an updated fiscal blueprint this week, say that they can adjust spending to balance their books, as well as gird for cuts the federal government may implement. Yet the predicament, even in a city known for wealth, underscores the financial challenge for states and cities around the country that have to make good on promises to police officers, teachers and other civil servants. "I do think there will be another conversation in the not too distant future about what is affordable for the city and our employees for pensions," said Controller Ben Rosenfield. "I don’t think where we are is where we need to end up."

New Jersey’s budget remains “structurally imbalanced” as Governor Chris Christie (R) continues to make only partial payments into the state’s retirement system, according to S&P Global Ratings, Bloomberg News reported on Friday. Christie’s proposed spending plan for fiscal 2018, which starts July 1, would leave the state with small reserves and “some vulnerability to potential revenue shortfalls,” analysts David Hitchcock and John Sugden said in a report. Future budgets “look much worse,” according to S&P, which reduced its credit rating on the state in November to A-, the fourth-lowest investment grade. That downgrade was the 10th from the three-major rating companies under Christie, the most of any New Jersey governor. Christie, a second-term Republican, leaves office in January. His successor “will face tough funding decisions as early as fiscal 2019,” S&P said.