The act of a company canceling an over-funded pension plan in order to recover the amount by which it is over-funded. In addition, pension reversion usually also involves replacing the canceled plan with a less expensive, fixed annuity plan using funds recovered from the former plan. The amount by which funds from the former plan exceed the cost of the new plan is paid to the company or employer.
Termination of a pension plan by an employer that wishes to capture the amount by which the plan is overfunded. Pension reversions are generally accomplished by using funds in the plan to purchase a fixed annuity from an insurance company. Excess funds beyond the cost of the annuity revert to the company.