A standard termination requires that the company purchase an annuity for the earned and accrued benefit or provide the equivalent amount of money in cash to the employee. Both those options maintain all of the employees earned and accrued benefits. The PBGC has a very favorable formula for calculating a lump sum. Fee if any plans are funded to that level. I lived a pension termination. I went over this stuff hundreds of times and attended several meetings with pension attornies. Delta could not even eliminate the lump sum provision in the pilot pension plan because it was a earned and accrued benefit. Doing that when the run on the bank started might have saved the plan. In the end it took a judge in a bankruptcy court to terminate the plan despite being only 20% funded and being frozen prior.
PBGC:Pension Plan termination
In a standard termination, an employer may end a plan only if there is enough money to pay all pension benefits accrued by workers as of the termination date. The plan administrator will pay the promised benefits by purchasing annuities from a private insurance company or making lump-sum payments to participants. Once a plan ends in a standard termination, PBGC's insurance responsibility ends.