The Pension Benefit Guaranty Corporation (PBGC) will pay retirement benefits for more than 1,600 current and future retirees at Hovensa LLC, which owns an oil refinery and oil storage terminal in the U.S. Virgin Islands.
The Hovensa Employees’ Pension Plan ended as of February 4.
Hovensa’s oil refinery was built by the U.S. oil giant Hess Corp. in 1966. By 1974, the refinery was processing more than 650,000 barrels of crude oil per day. However, in 2012, the refinery was shut down because of a decline in demand.
The company has attempted to sell its operations without success. Therefore, Hovensa will finish winding down its operations and the pension plan will be abandoned.
The PBGC estimates the pension plan is 75% 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.