If your plan is the type of plan insured by PBGC, your plan is insured even if your employer fails to pay the required premiums. PBGC insures defined benefit plans, the type that promise to pay participants a specific monthly benefit at retirement. The easiest way to find out if your plan is insured by PBGC is to ask your employer or plan administrator, the person who administers the plan. Although PBGC insures most defined benefit plans, there are some that are not covered. These are normally sponsored by an individual company for the benefit of its workers.
Employers can end pension plans through a process called termination.
There are two types of termination. In a standard termination, an employer ends a plan that is fully funded after showing PBGC that there is enough money to pay all benefits owed workers and retirees. Depending on the plan's provisions, the employer either pays each participant all the benefits he or she is owed in a lump sum or the employer purchases an annuity for each participant from an insurance company. These annuities then provide benefits to participants when they retire. Your employer must tell you what insurance company will provide the annuities before the money in the plan is distributed.