US - Rosemore has assumed direct responsibility for the pension plan sponsored by its subsidiary Crown Central Petroleum and Crown will contribute US$45m more to the plan by the end of 2005 than legally required under a deal struck with the Pension Benefit Guaranty Corporation (PBGC).
The pension plan of Crown, a refiner and marketer of petroleum products that is divesting its operations, is underfunded by US$113m on a termination basis, according to PBGC estimates.
“This agreement provides additional protection for about 3000 workers and retirees in the Crown plan and for the federal pension insurance system,” said PBGC executive director Bradley Belt.
With assets of US$128m to cover benefit liabilities of US$241m, the PBGC estimates Crown Central Petroleum Retirement Plan is underfunded by US$113.
The federal insurer determined that the plan required additional financial protection and immediate sponsorship by Rosemore because Crown would “lack the resources to administer and finance the plan” after it sells substantially all of its operations.
The plan has been completely frozen for future benefit accruals and entry of new participants since January 25, 2005. As security for payment by Crown of the additional pension contributions, the federal insurer will hold liens on certain assets of the company.
The agreement came as part of the PBGC’s early warning programme, under which the agency monitors companies with underfunded pension plans and negotiates protections when transactions put workers’ pensions at risk.
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