I confirmed that the above work-around (adding session required
pam_env.so to /etc/pam.d/common-session) works great. Perhaps that's all
Ubuntu needs to do to fix this bug? Not sure if there are any negative
side effects, but so far I'm not experiencing any.

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https://bugs.launchpad.net/bugs/952185

Title:
  ~/.pam_environment not parsed when HOME is encrypted

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