2012 could be a big year for pension plan terminations, according to Vanguard Strategic Retirement Consulting. Many sponsors of frozen defined benefit plans are considering terminations because the Pension Protection Act of 2006 reduced regulatory stumbling blocks related to offering lump-sum payments.

If you are considering closing a DB plan, you must figure out a way to make the transition easier for employees. Vanguard recommends putting in place a  well-planned participant strategy that includes clear, timely communications; participant access to objective advice; and possible enhancements to your existing defined contribution plan.

If your plan already is frozen, its termination will have little financial impact on participants, but their concerns should be carefully considered. In addition to sending any required notices about the closure, you will want to tell participants why you are terminating the plan. Be clear about the financial or other implications for participants.