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Walter Energy Inc. is seeking a bankruptcy court’s approval to end employment agreements with its unions and stop funding retiree benefits so it can move ahead with the sale of its Alabama coal operations, the Wall Street Journal reported today. Walter said in court papers filed yesterday that its plan to sell its assets out of bankruptcy is conditioned upon its rejection of collective bargaining agreements that cover more than 800 unionized workers as well as benefit plans for more than 3,000 union and non-union retirees. The coal miner’s lenders, which have stepped forward to acquire Walter’s Alabama operations, say they won’t be bound by union pacts that seek to hold the successors to their terms. Walter Energy says that this should come “as no surprise,” in light of what it calls the agreements’ “onerous” terms. “The debtors suffer from crippling legacy labor obligations, principally in the form of medical benefits and pension obligations, as well as insupportable hourly labor cost,” the Birmingham, Ala.-based Walter said in court papers. A spokesman for one of the affected unions, the United Steelworkers, said the union would fight the request.

Kentucky now carries a dubious distinction: home to the worst-funded U.S. pension in at least 14 years, the Wall Street Journal reported on Friday. Kentucky officials on Thursday presented the dire financials of its large state-employee fund. It has just $2.4 billion in assets to cover $12.4 billion in future liabilities for the year ended June 30. The Kentucky Employees Retirement System plan, covering the benefits of around 120,000 state workers, has a funding ratio — the basic measure of assets against liabilities — of just 19 percent. A decade of Kentucky lawmakers short-changing on pension contributions, plus investing losses from the most recent financial crisis, have pummeled a state-employees plan that was close to fully funded in the early 2000s. In the prior year, the Kentucky fund only had 23.9 percent of assets needed to cover future liabilities — making it the then-second lowest ever recorded by the Public Plans Database.

Fitch Ratings said on Thursday that Cook County's plan to significantly boost payments to its pension fund over the amount required by Illinois law could lead to legal challenges by taxpayers, Reuters reported on Friday. Illinois' biggest county, which is home to Chicago, passed a fiscal 2016 budget on Wednesday that increases its pension payment by $270.5 million over the $195 million required by state law, according to the credit rating agency. Revenue for the bigger payment will come from a 1 percentage point increase in the county's sales tax that is expected to raise $308 million for the budget. Cook County, like the state of Illinois, Chicago, and the Chicago Public Schools, has been struggling with a big unfunded pension liability and limited ability to cut costs due to an Illinois constitutional provision protecting public worker retirement benefits from being reduced. Legislation pushed by the county to change retirement benefits and require actuarial funding stalled in the Illinois Legislature. Pension reform laws enacted for Illinois and Chicago retirement systems were found by state courts to be unconstitutional.

A Pennsylvania Senate committee approved Wednesday a new bill aimed at rescuing troubled municipal pension plans from insolvency, the Hazleton Standard Speaker reported yesterday. The measure cleared the Finance Committee by a mostly party line vote would set different options for municipal pension plans for paid police and firefighters based on their financial health. It would transfer management of financially distressed pension plans in Scranton and Hazleton to the Pennsylvania Municipal Retirement System, an independent state agency. Pennsylvania currently has 2,600 municipal pension plans, of which one-third are less than 80 percent funded. A pension plan is considered financially healthy if it’s 90 percent funded or higher.

Chicago tried to convince a sometimes skeptical Illinois Supreme Court on Tuesday that a 2014 law deserves to survive a constitutional challenge because it aims to save two of the city's retirement funds from insolvency by guaranteeing adequate funding, Reuters reported yesterday. The city, which is struggling with a $20 billion unfunded pension liability in its four retirement systems, is appealing a Cook County Circuit Court judge's July decision voiding the law. In oral arguments on Tuesday, Chicago's top city attorney, Stephen Patton, said that while the law includes "modest reductions in future automatic increases" in retiree pensions, it differs from a 2013 law that unilaterally cut benefits for Illinois' retirement systems and was struck down as unconstitutional by the state high court in May. The Illinois Supreme Court in May tossed out the 2013 law that reduced retirement benefits for state workers to ease Illinois' $105 billion unfunded pension liability. All seven justices agreed that the Illinois Constitution protected public sector workers against pension benefits cuts.

The deficit racked up by the federal agency that insures pensions for about 40 million Americans has increased 23 percent to $76.4 billion, the Associated Press reported yesterday. The agency's program for multi-employer pension plans continues to account for a large share of the deficit, $52.3 billion. The deficit reported yesterday for the year ended Sept. 30 was the widest in the 41-year history of the Pension Benefit Guaranty Corp. It has now run shortfalls for 13 straight years.

Houston is weathering a prolonged plunge in oil prices, but the city may have an even bigger problem: its pensions, the Wall Street Journal reported today. Though economic growth has only slowed, not stalled, in Texas’ largest city, its finances are showing what several investors and analysts describe as warning signs. Those include a rapidly growing gap in funding its retirement plans for public workers and a limit on its revenue-raising capabilities imposed by a voter-approved cap on property taxes. The $3.2 billion pension-funding gap is threatening Houston’s Aa2 credit rating from Moody’s Investors Service, hurting demand for its debt and emerging as an issue in the city’s mayoral race. Moody’s this summer warned it may downgrade the city’s debt if Houston fails to address its pensions, noting the cap limits the city’s financial flexibility.

Boeing has agreed to pay $57 million to settle a lawsuit that accused it of charging excessive fees and choosing higher-cost investment offerings for the workers and retirees who participate in its 401(k) retirement plan, the New York Times reported today. The amount of the settlement, tentatively reached in August on the eve of a trial, was disclosed yesterday, and the two sides have asked a federal judge in Illinois for approval. With the settlement, nine large American companies have paid a combined $271.5 million over class-action lawsuits brought on behalf of workers by a St. Louis lawyer who has pushed major corporations for more accountability in the retirement plans they offer. Other companies that have settled include Ameriprise Financial, Cigna and Kraft Foods.

Alpha Natural Resources, one of the largest U.S. coal companies, wants to drop benefits for more than 4,500 miners, spouses and their dependants, Reuters reported yesterday. That step would erase roughly $125 million in obligations for the Virginia-based company as it tries to mollify creditors stung by the company's bankruptcy filing in August, according to court filings. But the move would also erase life insurance and health benefits for about 4,580 non-union retirees, disabled former workers and their families, the company said in its filing with a bankruptcy court in Richmond. The company has asked permission to drop benefits such as "hospital, medical, prescription, surgical and life insurance" at the end of December, according to a court filing that was lodged on Tuesday.