How do Severance, Layoff, or Disability Affect My Benefits?

Kingsview Insights, Boeing
|
September 27, 2025

Severance Provisions

If you receive a severance package, that payment will not:

- Have 401(k) deductions or company matching contributions applied to it.
- Contribute to the formula used to calculate your pension benefits.

Layoff Provisions

Boeing 401(k) Retirement Plan

Contributions

- Contributions stop with your last paycheck.
- Company Non-Elective Contributions: Eligible employees who leave the company due to layoff may still receive Company Non-Elective Contributions for the applicable Plan Year.

Vesting: All vested money you and Boeing have contributed to your 401(k) account is yours.

Timeframe for Distributions: Full distribution requests generally cannot be processed until 15 days after your employment termination date. This allows for final contributions from your last regular paycheck and any outstanding loan repayments to be posted to your account.

Automatic Enrollment Opt-Out/Refund: If you were automatically enrolled in the 401(k) and laid off shortly after, you may be able to request a refund of your automatically made Pretax Contributions within 60 calendar days from the first automatic contribution deduction.

Distribution Options Upon Layoff:

- Account Balance $1,000 or Less: If your account balance is $1,000 or less, it will be automatically paid out as a lump sum approximately 90 days after you are notified of your distribution options. You have this 90-day period to elect a cash distribution or a direct rollover to an IRA or another qualified retirement plan. If no election is made, it will be paid directly to you.
- Account Balance Greater Than $1,000:
  - Leave Money in the 401(k)
  - Take a Distribution: Options include a total Lump Sum, Partial Distributions, Installment Payments, or purchasing an Annuity.
  - Rollovers: You can roll over your Boeing 401(k) distribution to an IRA or another employer's qualified plan.

Tax Implications:

- Distributions that are not rolled over are generally subject to a mandatory 20% federal income tax withholding and potentially state taxes.
- An additional 10% early withdrawal penalty tax typically applies if you are under age 59½, unless an exception applies (e.g., separating from service at age 55 or older in the year of termination).
- Special tax treatment on "net unrealized appreciation" (NUA) may apply to in-kind distributions of Boeing Stock as part of a lump sum distribution.

Outstanding Loans: If you have an outstanding 401(k) loan when you are laid off, you can set up recurring monthly loan payments by direct debit.

Early Withdrawal Penalty: If you are laid off and take a distribution before age 59½, an additional 10% early withdrawal penalty tax generally applies to the taxable portion not rolled over. However, an exception to this penalty applies if you terminate employment (which includes layoff) during or after the year you reach age 55.

Required Minimum Distributions (RMDs): If you leave money in your Boeing 401(k) after a layoff, when you reach your RMD Age you will have to start taking distributions.

Account Access: You will no longer be an active contributor to the plan, but you will still have access to your account online via NetBenefits.com or by calling the Boeing Financial Benefits Service Center at 866-422-3539.

Boeing Pension Plans (BCERP and PVP)

Vesting Service During Layoff:

- BCERP: If you are on layoff, you will generally continue to earn Vesting Service for up to one year, which counts towards your eligibility for a pension benefit.
- PVP: Your Vesting Service may continue for, generally, up to one year for most leaves of absence, including layoffs. Interest Credits on your Credit-Based Benefit will also continue to accrue during layoff until your Benefit Commencement Date or the calendar year you reach age 70½.

Reemployment After Layoff: iStock-2163640206

- BCERP: If you are reemployed by Boeing within 6 years of your layoff date, your prior service may be restored if you complete a Year of Eligibility Service after reemployment.
- PVP: If you return to work within 6 years of being laid off, you will begin earning Vesting Service and retain prior Vesting Service. If you return after 6 years and were not vested, you lose prior Vesting Service.

Early Retirement Eligibility from Layoff:

- Both BCERP and PVP allow you to qualify for Early Retirement benefits if you meet specific age and service requirements while on layoff.

Company Non-Elective Contributions:

- Eligible employees who leave the company due to layoff may still receive Company Non-Elective Contributions for the applicable Plan Year. Non-Elective Contributions for the applicable Plan Year, provided they meet certain criteria.

Lump-Sum Payment Option:

- For some participants (e.g., those who last accrued Credited Service while represented by SPEEA), a lump-sum payment option for the entire vested BCERP benefit became available starting January 1, 2017.

Disability Provisions

Boeing 401(k) Retirement Plan

Definition of “Disability”: Determined to be disabled by the Social Security Administration (SSA).

Withdrawal Option: Withdrawals upon disability are permitted

Eligibility: This option is generally available to nonunion participants and to union participants if specifically provided for in their collective bargaining agreement.

Exceptions for Merged Plans: Some specific plans that merged into the Boeing 401(k) (e.g., eXMeritus Software Federal Systems, Inc. 401(k) Plan, Global Aeronautica LLC 401(k) Plan) allow for withdrawals if you qualify for long-term disability benefits under a Company-sponsored disability plan, even if you haven't received an SSA disability determination.

Tax Implications: While you will typically owe regular income taxes on the taxable portion of the money withdrawn, the 10% early withdrawal tax penalty generally does not apply to disability withdrawals from your 401(k). State income taxes may also apply.

Company Non-Elective Contributions: Eligible employees who leave the company due to disability may still receive Company Non-Elective Contributions for the applicable Plan Year. Non-Elective Contributions for the applicable Plan Year, provided they meet certain criteria.

Boeing Pension Plans (BCERP and PVP)

Eligibility for Disability Retirement: You may qualify if you become totally and permanently disabled (as determined by the SSA) while an active employee of Boeing and your SSA disability determination date is on or after your 50th birthday and prior to your termination of employment. You must also have been absent from work due to disability for at least 6 consecutive months (or a shorter interruption), have 10 or more years of Vesting Service, and be younger than age 65.

Application Process: You must apply for disability retirement by submitting a timely application and providing your SSA disability determination letter.

Benefit Commencement: Benefits become payable on the first day of the month after meeting all disability criteria, but no payments will be made until your termination of employment from Boeing.

Conversion from Early Retirement: If you are eligible for Early Retirement when your employment terminates and you meet all other disability requirements except the SSA determination letter, you can apply for and commence Early Retirement benefits. Once you receive your SSA disability determination letter, your Early Retirement benefit can be converted to a disability retirement benefit retroactively.

Amount of Benefit: The monthly disability benefit is generally an unreduced amount as determined by the benefit formulas, but it may be adjusted if paid in certain Joint and Survivor Annuity forms or as a Lump Sum.

Method of Payment:

Unmarried: Generally a Single Life Annuity.
Married: Generally a 50% Joint and Survivor Annuity, unless another option is chosen with spousal consent.

Proof of Continued Disability: The Plan Administrator may require ongoing proof of continued SSA disability benefits for you to continue receiving BCERP disability benefits.

Termination of Benefits: Disability retirement benefits will end if you cease to be disabled, are re-employed by Boeing, or fail to provide proof of continued disability. If benefits end before age 65, you'll then be eligible for other retirement benefits.