Pension Benefit Guaranty Corporation (PBGC), a U.S. government agency, will pay retirement benefits for more than 1,600 current and future retirees of HOVENSA.
The agency is stepping in because the shuttered oil refinery on St. Croix’s south shore that most recently operated as an oil-storage facility has closed its operations and its pension plan has been abandoned as of Feb. 4, according to information reported on the PBGC website.
PBGC will pay all pension benefits earned by the plan’s retirees up to the legal limit of $60,136 annually for a 65-year-old.
Employees and retirees will continue to receive uninterrupted benefits from HOVENSA until PBGC assumes responsibility. Future retirees may apply for benefits as soon as they are eligible.
According to PBGC estimates, the plan is 75 percent funded with $127 million in assets to pay $169 million in benefit liabilities. The agency is expected to cover $38.2 million of the $41.8 million shortfall.
HOVENSA shutdown its oil refining operations in early 2012 due to a decline in demand, but remained open as an oil storage facility. In Nov. 2014, the company’s plan to sell the plant to Atlantic Basin Refining fell through, prompting its owners to cease all operations at the plant.
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