Termination in Pension Plan

Termination benefits may either be special, offered only for a short time period, or contractual, required by the terms of the plan in a specific event such as a plant closing. Loss and liability should be recognized for special termination benefits when employees accept the offer and the amount can be reasonably estimated. The entry when "early retirement payoff" occurs is to debit loss and credit estimated liability equal to the current payment plus discounted value of termination benefits. See also Curtailment in Pension Plan; Settlement in Pension Plan.