In an agreement with the Labor Department's Pension and Welfare Benefits Administration, Revlon Consumer Products Corp., New York, agreed to guarantee an $86.7 million annuity contract purchased from Executive Life Insurance Co.
Revlon will act as the backstop if Aurora National Life Assurance Co., which is making Executive Life's payments, defaults on the contract.
In 1985, Revlon and its affiliate, National Health Laboratories, terminated defined benefit plans for about 9,000 participants. Revlon then purchased annuities from Executive Life on behalf of the former plan participants; the company got more than $111 million in surplus assets after the plans were terminated. When Executive Life went into California State receivership in 1991, Aurora took over the annuity payments.
Currently, Aurora pays 72% of former participants' monthly annuity payments. Revlon makes up the 28% shortfall and will continue to do so, a PWBA spokeswoman said.
The agreement called for an independent monitor to make sure participants get either monthly or lump-sum payments.
In mid-December, the PWBA made a similar agreement with Bulova Corp., and its parent Loews Corp., New York, which agreed to guarantee a $56.2 million annuity contract purchased from Executive Life. Bulova terminated pension plans for about 2,215 participants in 1984, and got more than $34.6 million in surplus assets after the plan was terminated.
Like the Revlon agreement, Bulova's former participants can choose between monthly annuity or lump-sum payments from Aurora. Bulova and its parent also will have an independent monitor to ensure participants get their benefits.
