---
title: How Do Severance, Layoff, or Disability Affect My Pantex Benefits?
description: The Pantex Savings Plan and Retirement Plans help employees and retirees prepare for retirement. They offer investment options, loans, withdrawals, and planning tools to support participants in building and protecting their Real Wealth.
image: https://insights.kingsview.com/hubfs/iStock-1398465647.jpg
---
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# How Do Severance, Layoff, or Disability Affect My Pantex Benefits?
- [Pantex](https://insights.kingsview.com/tag/pantex)
- |
- March 9, 2026
- By
- [Keith Demetriades, CFP®, CKA®](https://www.kingsview.com/office/pampa-office/)
[Back to Home](https://insights.kingsview.com/pantex-resource-library)
*Keith's Note: "Unexpected events like layoffs, disability, or early exits can have a significant impact on your Pantex retirement benefits and long-term financial security. Understanding how these situations affect your 401(k), pension, and severance options helps you make proactive decisions to protect your Real Wealth and ensure your retirement plans stay on track." - Keith Demetriades, CFP®, CKA® | Financial Advisor Specializing in Pantex Retirees.*
### **How Do Severance, Layoff, or Disability Affect My Pantex Benefits?**
**What Are My Disability (Short-Term and Long-Term) and Retirement Benefits at Pantex?**
**401(k) Savings Plan Impact**
**Vesting:** If you leave the company because you are Totally and Permanently Disabled, you become 100% vested in all company matching contributions and [Enhanced Defined Contributions](https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500).
**Contributions:** Contributions to the 401(k) Savings Plan continue during Short-Term Disability (STD) but cease during Long-Term Disability (LTD).
**Payout Eligibility:** If you are Totally and Permanently Disabled, you are eligible to receive the full vested value of your 401(k) Plan account.
**Tax Penalty Exemption:** If a 401(k) loan defaults while you are under age 59 1/2, the outstanding balance is treated as a taxable distribution and subject to a 10% penalty, unless you are disabled.
**Loan Payments:** If you are on Long-Term Disability, you must continue to make loan payments directly to [Voya Financial](https://insights.kingsview.com/how-can-i-get-help-with-my-pantex-retirement-benefits). Failure to do so will cause the loan to default.
**Pension Plan Impact and Accrual**
**Accrual of Service:** While on an approved Long-Term Disability (LTD) leave, you will continue to accrue [Pension Service Credit](https://www.ers.texas.gov/active-employees/retirement/service-credit-for-state-of-texas-retirement) under the plan just as if you had continued working.
- Employee contributions to the pension plan will be waived during the period of an approved LTD.
- During LTD, your earnings used for the pension calculation will remain the same as they were when you became disabled.[](https://www.kingsview.com/office/pampa-office/)
**Receiving Both Benefits:** Generally, you cannot receive both an LTD disability benefit and a retirement benefit under the pension plan at the same time, unless you are age 70 1/2 or older.
- **Pantex Guards Union Exception:** PGU employees who elect to retire while transitioning to LTD status may have both benefits run concurrently.
**Retirement Options:** Once you reach pension eligibility while remaining on approved LTD, you may retire under the same conditions as any other participant.
### **Layoff and Severance from Service**
**401(k) Savings Plan Impact (Vesting and Service)**
**Severance from Service Definition:** For 401(k) vesting purposes, severance from service occurs one year after your first day of absence due to layoff.
**Restoration of Service (Vested Participants):** If you are re-employed more than one year after severance, and you had any vested interest in any account in the Pantex Plans on your date of severance, your prior [Credited Service](https://www.ers.texas.gov/active-employees/retirement/service-credit-for-state-of-texas-retirement) will automatically be restored upon re-employment.
**Restoration of Service (Y-12 Plan):** If you are re-employed more than one year after severance and you had any vested interest in Company contributions in the Y-12 Plan on your date of severance, your prior Credited Service will automatically be restored.
**No Accrual:** You will not earn Credited Service during a period of severance lasting one year or more.
**Pension Plan Impact (Vesting and Service)**
**Vesting:** If you are no longer an employee for any reason after completing at least five years of Credited Service, you are vested.
**Severance Date:** Severance from service occurs one year after your first day of absence due to layoff.
**Service Restoration:** If you are reemployed more than one year after severance and you were vested as of that date, your prior Credited Service and Company Service will be restored automatically upon re-employment, but you will not earn Pension Service Credit for the period of severance itself.
### **Severance and Involuntary Termination**
Severance pay is generally paid to eligible non-bargaining unit employees involuntarily terminated in a reduction in force (RIF). This type of separation affects retirement eligibility favorably.
**401(k) Savings Plan Consequences**
**Full Vesting:** If your employment is involuntarily terminated for reasons other than cause, you become 100% vested in all company matching contributions and [Enhanced Defined Contributions](https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500), adjusted for investment earnings and losses.
**Forfeiture:** If you are discharged for cause before achieving 100% vesting, you will forfeit any unvested company matching contributions and Enhanced Defined Contributions.
**Payout:** Upon separation, you can choose a payout, rollover, or leave the vested funds invested in the 401(k) Savings Plan.
**Outstanding Loans:** Any outstanding loans must be paid within six months of leaving the company; otherwise, the balance is treated as a taxable distribution.
**Pension Plan Consequences (Y-12 Special Rule)**
**Accelerated Eligibility (Y-12 Plan):** If your employment is involuntarily terminated by action of the company (other than for cause), you may be deemed to have met the age and service requirements for early retirement benefits:
- **Full Pension Benefit:** Available if you are age 60 or over with at least eight years of Company Service, OR if your age and service total 83 or more points (85-Point Structure), or 79 or more points (81-Point Structure).
- **Reduced Pension Benefit:** Available if you are at least age 48 with at least eight years of Company Service.
**Benefit Calculation:** Any service added under the involuntary termination provisions counts only for determining your eligibility for a full or reduced pension, but will not count to determine the final amount of the pension benefit itself.
### **Real Wealth Questions**
How do layoffs or early exits affect your healthcare coverage before you are eligible for Medicare?
Are you eligible for retirement benefits in the event of disability or unexpected termination?
What other financial resources are available to you in the event that you become disabled or are forced to leave the company ahead of schedule?
If you had to leave Pantex unexpectedly, what would be your plan? Full retirement? Another full-time job? Semi-retirement with part-time work?
### What To Do Next
Review your current 401(k), pension, and disability coverage to understand how a layoff, severance, or disability could affect your benefits. Consider the timing of any potential early retirement or separation, and evaluate how outstanding loans or vesting rules may impact your account balances.
For personalized guidance on navigating these situations and creating a plan that protects your Real Wealth, reach out to [Keith Demetriades, CFP®, CKA®,](https://www.kingsview.com/office/pampa-office/) a financial advisor specializing in Pantex retirees.
[Back to Home](https://insights.kingsview.com/pantex-resource-library)
[](https://calendly.com/kdemetriades)
## Frequently Asked Questions About Pantex Benefits
What happens to my 401(k) if I become disabled?
You become 100% vested in all company matching and Enhanced Defined Contributions. Contributions continue during Short-Term Disability but cease during Long-Term Disability.
Can I receive both pension and disability benefits at the same time?
Generally no, unless you are age 70 ½ or older. PGU employees may have both benefits concurrently under certain conditions.
How does a layoff affect my 401(k) and pension?
If involuntarily terminated for reasons other than cause, you become fully vested in company contributions and may restore prior service if re-employed after more than a year.
What if I default on a loan while disabled or after leaving the company?
Outstanding loans must be repaid within six months of leaving. Defaulted loans are treated as taxable distributions, though disability may exempt you from early withdrawal penalties.
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© 2026 Kingsview Partners. All Rights Reserved.
Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser. Insurance products and services are offered and sold through Kingsview Trust and Insurance Services (“KTI”), by individually licensed and appointed insurance agents. KWM and KTI are subsidiaries of Kingsview Partners. KWM is an investment adviser registered with the Securities and Exchange Commission (“SEC”).
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