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Standard Terminations: Q&A

A standard termination is a termination of a plan that has enough money to pay all benefits owed to participants and beneficiaries. A pension plan may be terminated only by following certain specific rules. For each participant or beneficiary, the plan administrator either purchases an annuity from an insurance company or, if the plan permits, pays the benefit owed in another form (such as a lump sum).

To terminate your plan in a standard termination, you must follow PBGC's regulation Part 4041 that sets out various notices and filing requirements. The standard termination forms and instructions are provided below.

Filing a standard termination

Yes. Although a valid standard termination filing requires original signatures by the plan administrator on the Forms 500 (Standard Termination Notice) and 501 (the Post-Distribution Certification) and by the enrolled actuary on the Schedule EA-S (the Standard Termination Certification of Sufficiency), the forms may be submitted electronically as a PDF to the general inbox. See GENERAL INSTRUCTIONS FOR FORM 500 AND 501 under the Standard Termination Filing Instructions for more information.

Large documents or documents with confidential information may be submitted to PBGC at Registration is not required for such submissions. All documents are protected and remain confidential.

Plan termination filings may be submitted via email to
Standard termination-related inquires may be sent to, and
Requests for coverage determinations may be sent to

Additionally, plan termination filings, standard termination-related inquiries, and coverage requests may also be sent to:

Pension Benefit Guaranty Corporation
Standard Termination Compliance Division
Processing and Technical Assistance Branch
445 12th Street SW
Washington, DC 20024-2101

The plan administrator should notify PBGC of a decision not to proceed with a termination after having filed a Form 500 (Standard Termination Notice) with the agency. Notification of the decision to withdraw a previously filed standard termination should be sent to or mailed to:

Pension Benefit Guaranty Corporation
Standard Termination Compliance Division
Processing and Technical Assistance Branch
445 12th Street SW, Washington, DC 20024-2101

In accordance with the requirements of the Notice of Intent to Terminate, the plan administrator must promptly inform all affected parties of the decision to not terminate the plan. If a decision is made to again proceed with the termination, the process must begin with a new date of plan termination and Notice of Intent to Terminate.

Notice of Intent to Terminate (NOIT) must be issued to affected parties (other than the PBGC) at least 60 days and not more than 90 days before the proposed termination date. Affected parties include participants, beneficiaries of deceased participants, alternate payees under qualified domestic relations orders, and employee organizations representing participants. (See 29 CFR 4041.23) A model NOIT is provided in Appendix B of the standard termination filing instructions.

Notice of Plan Benefits must be issued to participants, beneficiaries of deceased participants, and alternate payees no later than the time the plan administrator files the Standard Termination Notice (PBGC Form 500) with the PBGC. (See 29 CFR 4041.24)

Standard Termination Notice (PBGC Form 500, including the Schedule EA-S) must be filed with the PBGC on or before the 180th day after the proposed termination date. (See 29 CFR 4041.25) Note:The PBGC has 60 days after receiving a complete Form 500 to review the termination for compliance with the law and regulations. (See 29 CFR 4041.26)

Notice of Annuity Information must be provided to affected parties other than the PBGC no later than 45 days before the distribution date if benefits may be distributed in an annuity form. (See 29 CFR 4041.23 (b)(5) and 4041.27)

Schedule MP and the applicable attachment(s) must be sent to the PBGC if the plan has missing participants. (See 29 CFR Part 4050)

Notice of Annuity Contract must be provided to participants receiving their plan benefits in the form of an annuity no later than 30 days after the contract is available. (See 29 CFR 4041.28 (d))

Post-Distribution Certification (PBGC Form 501) must be filed with the PBGC no later than 30 days after all plan benefits are distributed. The PBGC will assess a penalty for late filings only to the extent the certification is filed more than 90 days after the distribution deadline (See 29 CFR 4041.29)

Distribution of benefits

Yes. A rollover of an amount exceeding a plan's de minimis cash-out level is an optional form of distribution that, when elected by a married participant, is subject to spousal consent. The plan may have a cash-out level of up to $5,000 without spousal consent. Distributions from the plan must comply with the written terms of the plan as well as the requirements of ERISA.

Yes. One purpose of the notice is to help participants make informed elections between lump sums and annuity benefits. Also, even a participant who has already elected a lump sum may change the election. This notice is not required in the case of a participant or beneficiary who will receive a nonconsensual de minimis cash-out.

Yes, there is a deadline for distributing assets to provide for all benefits under the plan, either by paying lump sums (as permitted) or buying an annuity contract. The deadline is normally the later of (a) 180 days after the end of the PBGC's 60-day (or extended) review period or (b) if the plan administrator has timely submitted a valid IRS determination letter request, 120 days after receipt of a favorable determination letter. The deadline may be extended. (See the instructions for the plan termination forms booklet for more details .) (This deadline does not apply to distributions of excess assets to participants or to the plan sponsor.)

An employer choosing to terminate a fully funded pension plan must distribute all plan benefits to participants and beneficiaries before completing the plan's termination. If someone cannot be found after a diligent search, the plan administrator must either purchase an annuity from a private insurer in that person's name and provide information on the missing person and insurer to PBGC or transfer the value of the person's benefit to PBGC's Missing Participants Program.

No. The PDC is due 30 days after you complete distribution in satisfaction of all plan benefits. The PDC includes a plan administrator's certification that assets in excess of those needed to satisfy benefit liabilities have been or will be distributed in accordance with applicable provisions of ERISA and implementing regulations. PBGC will not assess a penalty if the PDC is filed within 90 days after the deadline for completing the distribution.

PBGC has provided guidance in Technical Updates 07-3 and 08-4:

  • Technical Update 07-3 provides guidance where the plan's termination date is before the effective date of the PPA 2006 changes to the interest rate and mortality table used in calculating minimum lump sum values. In these cases, the PPA 2006 changes do not apply. Minimum lump sums are determined by pre-PPA 2006 rules regardless of when the lump sum is paid.
  • Technical Update 08-4 provides guidance where the plan's termination date is on or after the effective date of the PPA 2006 changes to the interest rate and mortality table used in calculating minimum lump sum values. In these cases, assuming the plan was amended to reflect the PPA 2006 changes before termination, the interest rate basis and mortality assumption are tied to the plan year in which the payment was made, not the plan year in which the plan terminated. For example, assume a calendar year plan is amended in 2008 to reflect PPA 2006 minimum lump sum assumptions and terminates on July 1, 2009. Also assume that the plan has a one-year stability period and a two-month lookback. Therefore, a lump sum paid in 2010 is calculated using the following assumptions:
    • Interest-based on the phase-in percentage for the plan year beginning in 2010 and the November 2009 rates. Accordingly, a lump sum paid in 2010 would be determined using a blended rate based on a 60 percent weighting of the November 2009 segment rates and a 40 percent weighting of the November 2009 30-year Treasury rate.
    • Mortality-based on the RP-2000 unisex mortality table project, in accordance with IRS rules, for annuity starting dates in 2010.

PBGC has been contacted by practitioners who have difficulty finding an insurance company to purchase irrevocable commitments from. In such cases, PBGC will approve requests for extension of time to distribute, though it may ask for additional information. PBGC also assists by providing names of insurers listed on recently submitted Post-Distribution Certifications. PBGC does not endorse any insurers.  Under current law, annuities must be purchased if the participants (and their spouses if they’re married) do not consent to a lump sum. PBGC has not encountered a situation where a plan administrator is unable to complete a standard termination for this reason.

No. Participants of a defined benefit plan covered under Title IV of ERISA must receive their full plan benefits [refer to Section 4041(b)(3)(A)]. Any administrative expenses that are paid from Plan assets may not reduce a participant’s benefit under such a plan.

Yes, in a standard termination, the transfer of a benefit of $5,000 or over is considered a distribution, and spousal consent is required.

No, a plan administrator must pay the total value of a missing participant’s designated benefit to PBGC, even if the plan administrator previously paid taxes to the IRS. PBGC will withhold taxes, as appropriate, when the missing participant is found and paid. Likewise, any annuity purchased for a missing participant must be for the total benefit without any reduction for tax withholding; the insurer will withhold as appropriate when a benefit is paid. There is also no need to issue 1099-R. They will be issued when payment to the participant is made.

Standard Termination Audits

Plans are selected from all standard terminations completed during the target period to meet our statutory requirement of a statistically significant sample. Currently, PBGC selects all plans with a participant count of more than 1,050 for audit. For plans with a participant count of 1,050 or fewer, PBGC randomly selects plans to audit. PBGC also may audit a plan when we have reason to believe there may be a problem (for example, when we receive a complaint by plan participants or a plan practitioner). In addition, PBGC audits all plans that distribute plan assets in satisfaction of plan liabilities before or without filing a Standard Termination Notice (Form 500) in accordance with the standard termination regulations. (PBGC reserves the right to take any other appropriate action in such circumstances.)

PBGC requires that participants and beneficiaries be made whole. For example, if participants did not receive all of the benefits to which they were entitled, the plan administrator must distribute additional benefits; or if participants were not given all of the options available to them under the plan, the plan administrator must provide those options and honor any changes requested. If the plan administrator does not cooperate in correcting errors, PBGC has the authority to nullify the termination or may ask a court to direct the additional payments to be made.

While PBGC makes the determination whether additional amounts are owed to participants, the income tax consequences for the plan sponsor, plan, and plan participants would be determined by Internal Revenue Code rules and regulations. You may wish to ask the IRS or your tax advisor(s) for specific guidance.

Conversion of a defined benefit plan into a defined contribution plan (whether a target benefit, profit-sharing, 401(k), or other type of defined contribution plan) is a voluntary termination of the defined benefit plan and is subject to all the rules and requirements governing terminations of defined benefit plans. This includes all notices to participants and beneficiaries and filings with PBGC. Benefit elections and spousal consents are governed by the applicable provisions of the Internal Revenue Code and the implementing regulations.

Errors PBGC finds include the following:

Accrued benefit calculation errors

  • Incorrect service or compensation
  • Not fully vesting terminated vested participants
  • Not crediting interest from Date of Plan Termination to date of distribution in cash balance plans or using a rate other than the 5-year average interest rate
  • Not protecting benefits accrued under prior plan provisions until the later of the effective date or the adoption date of amendment or restated plan
  • Not paying the top-heavy minimum if greater than the accrued benefit or the account balance in a cash balance plan

Lump sum calculation errors

  • Use of incorrect interest rate(s), mortality table, annuity starting dates, or age
  • Not protecting plan assumptions if plan provides a higher benefit than 417(e)
  • Use of assumptions stated in post-termination amendments if they provide a lower benefit
  • Use of PPA assumptions either without amending for PPA or amending for PPA after the last day of the first plan year beginning on or after January 1, 2009
  • Use of assumptions for an incorrect stability period/lookback month in calculation of 417(e) minimum lump sums

Other errors

  • Failure to obtain appropriate elections and spousal consents
  • Failure to include in election forms all forms of benefit provided by the plan
  • Alternative treatment (waiver) of benefits by non-majority owners
  • Failure to include all benefit options in annuity contracts and mirror plan provisions
  • Deduction of processing fees from participants’ benefits
  • Incomplete information on missing participants
  • Missing participants’ benefits not transferred to PBGC
  • Failure to calculate Missing Participants’ benefits in accordance with PBGC Section 4050.5
  • Rollover of Missing Participants’ benefits with a lump sum value between $1,000 and $5,000 into an IRA

Contact Us

Email: for technical inquires related to plan terminations or coverage. for the submission of plan termination filings. for the submission of coverage requests.


1-800-736-2444 or 202-229-4242 in the Washington, DC area. TTY/ASCII users may call 711.


Pension Benefit Guaranty Corporation
Standard Termination Compliance Division
Processing and Technical Assistance Branch
445 12th Street SW, Washington, DC 20024-2101

If you still need assistance after calling or if you have a complaint about the service you received, please contact the problem resolution officer (Practitioners) at 202-229-3923 or via email at TTY/ASCII users may call 711. If you prefer to write, send your letter to:

Pension Benefit Guaranty Corporation
Problem Resolution Officer (Practitioners), Suite 610
445 12th Street SW 
Washington, DC 20024-2101

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