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Different steps must be followed depending on the funded status of the plan. Pension plans must be fully funded at the time of termination, so it makes a difference in the termination timeline whether a plan needs to sink millions of dollars into the plan before it can be terminated.
Application of the definitions. Let's assume that a plan includes both post severance compensation and post year end compensation (both for 415 limits and for determining benefits under the plan) and a participating employee terminates on December 31, 2008 (limitation year is the calendar year).