PBGC Deal Strengthens Pensions at Crown Central Petroleum
FOR IMMEDIATE RELEASE
February 14, 2005
WASHINGTON-The Pension Benefit Guaranty Corporation has reached an agreement with Rosemore Inc. of Baltimore to strengthen the pension plan sponsored by its subsidiary Crown Central Petroleum Corp., a refiner and marketer of petroleum products that is divesting its operations. Under terms, closely held Rosemore has assumed direct responsibility for the pension plan and Crown will contribute $45 million more to the plan by the end of 2005 than required by law.
"This agreement provides additional protection for about 3,000 workers and retirees in the Crown plan and for the federal pension insurance system," said PBGC Executive Director Bradley Belt.
With assets of $128 million to cover benefit liabilities of $241 million, the Crown Central Petroleum Retirement Plan is underfunded by $113 million on a termination basis according to PBGC estimates. The agency 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, PBGC will hold liens on certain assets of the company.
The agreement is a product of PBGC's Early Warning Program under which the agency monitors companies with underfunded pension plans and negotiates protections when transactions put workers' pensions or the federal pension insurance program at risk.
The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 31,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
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PBGC No. 05-24