Hovensa LLC, an oil refinery that operated in the U.S. Virgin Islands, is abandoning its pension plan after shuttering operations in 2012.
The Pension Benefit Guaranty Corp. will assume pension obligations to 1,600 current and future retirees, covering all benefits up to the legal limit of $60,136, according to a statement from the agency.
The plan is reportedly 75 percent funded, with $127 million in assets covering $169 million in liabilities. The PBGC said it expects to cover $38.2 million of the $41.8 million shortfall.
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Slowing global demand and competition from more modern facilities led to the refinery's closing in 2012. Built in 1966, it was processing 650,000 barrels of crude by 1974, making it the largest oil refinery in the world at the time. Attempts to sell facilities since the closing have failed.
Located on St. Croix, Hovensa was the territory's largest private employer when it dismissed its 2,000 workers. It accounted for 20 percent of the islands' GDP.
The company, which was half owned by Hess Corp. and half by the Venezuelan state-owned oil company Petroleos, lost $1.3 billion in its last three years of operations.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
