Defined Benefit Plan Standard Terminations

Summary

This practice note describes the procedure for the standard termination of single employer defined benefit pension plans insured by the Pension Benefit Guaranty Corporation (PBGC). Standard termination is the procedure for voluntarily closing out a PBGC-insured plan by distributing its assets in satisfaction of all plan benefit liabilities. The note discusses the prerequisites for a standard termination, the required notices to participants and the PBGC, the liabilities that must be satisfied, the methods of distributing plan assets, the disposition of plan assets in excess of those necessary to satisfy benefit liabilities, and the filing of the final IRS determination letter application and Form 5500 annual report.