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.
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. 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 under the plan just as if you had continued working.Retirement Options: Once you reach pension eligibility while remaining on approved LTD, you may retire under the same conditions as any other participant.
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 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 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, 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: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.
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?
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®, a financial advisor specializing in Pantex retirees.