Q: Can a plan be terminated?

Although pension plans must be established with the intention of being continued indefinitely, employers may terminate plans.  If a plan terminates or becomes insolvent, ERISA provides employees with some protection.  In a tax-qualified plan, accrued benefit must become 100 percent vested immediately upon plan termination, to the extent then funded.  If a partial termination occurs in such a plan, for example, if an employer closes a particular plant or division that results in the termination of employment of a substantial portion of plan participants, immediate 100 percent vesting, to the extent funded, also is required for affected employees.