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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 agency is stepping in because Hovensa plans to close its operations and the pension plan will be abandoned. The Hovensa Employees' Pension Plan will end as of Feb. 4, 2015.

PBGC will pay all pension benefits earned by the plan's retirees up to the legal limit of $60,136 a year for a 65-year-old.

Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.

Employees and retirees who are participants in Hovensa's plan will continue to receive benefits from the company until PBGC assumes responsibility.

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'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.

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