First, when did this happen? More or less than 60 days ago? If less than 60 days, you can rollover the money into a new plan or an IRA without tax or penalty. If more than 60 days, you can still do a rollover but you have to get a waiver of the 60 day rule. Be aware that you have to rollover the entire amount, even if they withheld tax. For example, if the balance was $10,000 and they sent you $8000 and withheld $2000 for taxes, you must deposit $10,000 in the new IRA for it to count as a rollover. You will get the taxes back with your refund. If you only deposited $8000 as a rollover, then the other $2000 would count as a withdrawal and you would pay income tax plus a 10% penalty. (Even if you need to borrow the money to cover the different, most of the time, the interest on a short term loan will be less than the taxes and penalty you would owe by not making up the difference.) Lastly, be sure to tell the new plan that your deposit is a rollover and not a new contribution.
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-termination-of-empl...
Now, as to the rules, I'm not sure what happens if the employer terminates their plans for all employees. If they kick you out because you have a low balance and left employment, they have to follow certain rules including notification, and in some cases they must rollover your funds to an IRA for you. I'm sure they are required to notify you of a full plan termination as well, but I don't have those rules at my fingertips. But it really doesn't matter--they did it, and what you need to do is establish a rollover IRA so you can deposit the money, maintain your tax- savings retirement funds, and avoid taxes and penalties.
