A PBGC news release said it stepped in because Irwin Financial is liquidating under bankruptcy proceedings and there will be no sponsor left to fund or administer the plan.
According to PBGC estimates, the Irwin Financial Corporation Employees Pension Plan is 56% funded, with assets of $26.7 million to cover $47.2 million in benefit liabilities. The PBGC expects to be responsible for $19.1 million of the $20.5 million shortfall. The plan, ended on September 8, 2009. The agency assumed responsibility for the plan August 4, 2010.
Irwin Financial operated two banks, Irwin Union Bank and Trust Co., and Irwin Union Bank, F.S.B. Irwin Union was shut down on Sept. 18, 2009, by the Indiana Department of Financial Institutions; the other bank was closed by the U.S. Treasury Department’s Office of Thrift Supervision.
Additionally, the Federal Deposit Insurance Corp.(FDIC) was appointed as receiver of both banks. The FDIC entered into a purchase agreement with First Financial Bank, N.A., of Hamilton, Ohio, to buy the banks, but the pension plan was not included in the agreement. The company filed for Chapter 7 liquidation on September 18, 2009, in the U.S. Bankruptcy Court.
Assumption of the plan’s unfunded liabilities will increase the PBGC’s claims by $19.1 million and was not previously included in the agency’s fiscal year 2009 financial statements, the agency said.