What it is:
A wasting trust holds the assets of qualified plans when the qualified plans are frozen.
How it works (Example):
Let's say Company XYZ has a pension plan for its employees. It decides to switch everyone over to a 401(k) plan. It moves the in the pension plan to a wasting trust, which becomes a pot of money that makes payments but no longer receives contributions (because everybody's retirement contributions are now going into the 401(k) plan).
The trust is a wasting trust because iteventually "waste away" down to $0.