What does "plan termination" refer to in a 401(k) context?

Plan termination in the context of a 401(k) refers specifically to the process of ending a 401(k) plan and distributing the assets to participants. This process involves several important steps, including notifying plan participants, determining the value of their accounts, and executing the distribution of funds, whether as cash or rollovers into another qualified retirement account.

Termination can occur for various reasons, such as the cessation of business or a decision by the employer to no longer maintain the plan. The proper termination process ensures that all legal requirements are met and that participants receive their entitled benefits in accordance with regulatory guidelines.

The other options relate to different aspects of plan administration. Changing investment providers does not equate to terminating the plan; rather, it's a management decision regarding the investment strategies within the plan. Amendments to plan eligibility requirements are modifications that do not involve ending the plan itself. Updating plan fees may affect the costs associated with participation, but again, it does not involve termination. Understanding the implications and procedures related to plan termination is crucial for administrators to ensure compliance and protect participants' benefits.