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Esta página no ha sido traducida. Por favor vaya a la página principal del sitio de español de PBGC para ver información disponible en español.

# Standard Terminations: FAQ for Workers and Retirees

Questions That Workers and Retirees Ask About Standard Terminations

##             What is a standard termination?          

It’s& the process under pension law that allows a single-employer pension plan to pay all of its obligations at once. In a standard termination, you will receive the full benefit you’ve earned up to the date the plan ended and will not earn any future benefits under this plan. Your plan can pay your benefit by purchasing an annuity for you, or if plan rules permit, can pay your benefit in another form, such as a lump sum.

##             How will you know if your plan is ending in a standard termination?          

The plan administrator will keep you informed about the process through a series of notices. The first such document is the **Notice of intent to Terminate, **which your plan administrator must send you 60 to 90 days before the proposed termination date.

What’s in this notice?
                                        - a statement that the plan administrator intends to end the plan in a standard termination;
                                        - a statement that PBGC’s guarantee ends after plan assets have been distributed;
                                        - a statement that the plan termination will or will not affect the monthly benefits of people already receiving benefits (whichever applies);
                                        - information about the annuity the plan administrator intends to purchase, if known; and
                                        - the name, address, and telephone number of a contact person to answer your questions.

##             How will you know how the standard termination affects your benefit?          

The plan administrator must send you a **Notice of Plan Benefits** no later than the time that the standard termination notice is filed with PBGC.

What must this notice include?
                                        - the personal data used to calculate the benefit amount, unless you have been receiving benefits for one year or more;
                                        - the amount and form of your benefit;
                                        - any change to your benefit that will happen after the proposed termination date; and
                                        - other information.

##             If it wasn’t included in the Notice of Intent to Terminate, when will you learn more about the company that will handle the annuity after the termination?          

If your benefit will be converted to an insurance company annuity, and information about the company wasn’t in the Notice of intent to Terminate, you’ll receive a **Notice of Annuity Information** no later than 45 days before the pension plan buys the annuity.

This notice must tell you which insurer will provide your annuity, and information about the coverage that the state guaranty association provides for your annuity.

##             How will you know that your plan administrator has signed a contract with an insurance company to cover your benefit with an annuity?          

If you will get your benefit as an annuity, you’ll get a **Notice of Annuity Contract** no later than 30 days after the contract is available.

##             How does a plan administrator file a standard termination?          

The plan administrator must file a Standard Termination Notice with PBGC by the 180th day after the proposed termination date. The notice includes plan and participant information that PBGC needs to process the termination filing.

##             Does PBGC review the termination filing?          

Under the pension law, we have 60 days after receipt of a complete filing to review the termination for compliance with the law and regulations, but may extend or suspend the 60-day period if we need more information for the review.

We may issue a **Notice of Noncompliance** within the review period if notices were not issued correctly or if the plan won’t have enough money to satisfy all plan benefits. A Notice of Noncompliance ends the standard termination proceeding, and the plan remains ongoing with your employer.

In certain cases, we may **not** issue such a notice even though we **could**, if the notice would be inconsistent with the interests of people covered by the plan.

##             When can the plan administrator start making benefit distributions to participants?          

If we don’t issue a Notice of Noncompliance, the plan administrator may start distributing benefits to participants and beneficiaries (in the form you chose) after the 60-day review period. If you’re already retired, sometime after the end of the review period, you will begin receiving your pension payments through the insurance company annuity. Or, if you will receive payments in another form – such as in one lump sum – the administrator will pay you that amount some time after the 60-day review period.

Distributions (to you, or to the insurance company, to pay for your monthly benefit,) must be completed by the later of (a) 180 days after PBGC’s 60-day review period ends, or (b) 120 days after the plan receives a favorable IRS determination letter. PBGC has the discretion to extend the distribution deadline, if requested.

##             I’m still in touch with some co-workers from many years ago who are covered by this pension plan. I’ve started getting notices but they didn’t. What should they do?          

If the standard termination is not yet complete, they can contact the plan administrator.If the standard termination is complete, your old co-worker can go to our unclaimed pensions page. When we find missing participants, we pay them their benefits along with interest.

##             What does PBGC do to make sure plan administrators follow the rules when they execute standard terminations?          

We audit a sample of plans that complete standard terminations for compliance with the plan provisions, pension laws, and regulations. As part of the audit we verify that people have received their full benefits either as annuities or lump sums. If we find errors, we require the plan sponsor to correct them. This may include making additional distributions to participants if the original distribution amounts were incorrect.

##             What do I do if my plan terminated in a standard termination, but I don’t think I received my full benefit?          

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##             Where can I get detailed information about the standard termination of a pension plan?          

The specific rules for terminating a single-employer plan in a standard termination are in sections 4041(a) and 4041(b) of the Employee Retirement Income Security Act (ERISA) and in PBGC’s regulations on *Termination of Single-Employer Plans*, 29 CFR Part 4041, Subparts A and B on PBGC’s website.

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May 19, 2021