It is important that you name beneficiaries for all of your retirement accounts.
Additionally, you should review those beneficiaries at least annually, and after a major life event, such as getting married, having a child, divorce, the death of a spouse, or a career change.
Making sure that your loved ones are cared for according to your wishes is an important step towards using your Real Wealth to secure a lasting legacy.
You may name anyone as your beneficiary for the 401(k) Plan.
Spousal Consent (Y-12 Plan): If you are married for at least one year and wish to name someone other than your spouse as your beneficiary, you must obtain your spouse’s written and notarized consent.
Spousal Consent (Pantex Plans): If you are married for any length of time and wish to name someone other than your spouse, you must obtain your spouse’s written and notarized consent.
Updating Designation: You can update or change your beneficiary information by contacting Voya Participant Services.
Default Payout
If no valid designation is made, your spouse will receive the vested account value (provided marriage length requirements are met: 1+ year at Y-12, married on date of death at Pantex).
If you are single (or married less than one year at death under the Y-12 Plan) and do not name a beneficiary, the vested account will be paid to your estate.
401(k) Savings Plan Death Payouts
Pantex Plan: Beneficiary receives the full account balance in a lump sum.
Y-12 Plan (Before Payment Commences): Beneficiary receives a lump sum, unless they elect to receive installments over a five-year period.
Y-12 Plan (After Payment Commences): If the participant was receiving payments over the joint life expectancy of themselves and their spouse, the remainder will be paid in installments over the spouse’s life expectancy.
Taxation: Beneficiaries receiving 401(k) benefits are never subject to the 10% tax penalty, regardless of the deceased's age at death.
Pension Plan Survivor Benefits
Spousal Eligibility: Generally, the surviving spouse must have been married to the participant for at least one year at the time of death to be eligible for pre-retirement survivor benefits under the Pantex Plans.
Y-12 Death in Service (5+ years service): A benefit is payable to the surviving spouse, dependent child(ren), or dependent parent. If the participant had 10+ years of service, the survivor benefit is payable immediately.
Pantex/Vested Participant Death: If conditions are met (e.g., age 45/55 and 10+ years service, or 5+ years Credited Service), the Spouse is eligible for a lifetime benefit equal to 50% of the accrued pension benefit.
Lump Sum Option for Spouse: Within 90 days of the participant's death, the surviving Spouse may elect a lump sum payment equivalent to the monthly pension benefit.
Payment of Contributions: If there is no eligible survivor (Spouse, dependent child, or parent), any employee contributions plus interest payable under the Plan will be paid to the deceased's estate.
Spousal Options and Divorce Provisions
Pension Payment Elections (Spousal Rights)
Normal Retirement Form: If married at retirement, the normal form of payment under the Pension Plans is the Qualified Joint and 50% Survivor Annuity. This provides a reduced pension amount, followed by 50% of that benefit continued to the surviving Spouse for life.
Waiver of Normal Form: To elect a form of payment other than the joint and 50% survivor benefit (such as a single life annuity), the participant must have their Spouse’s written and notarized consent. This consent acknowledges the effect of the election on the Spouse.
Finality: Once pension payments commence, the designated surviving Spouse cannot be changed in the event of divorce.
Divorce, QDROs, and Insurance
Qualified Domestic Relations Orders (QDRO): If you anticipate that a court may issue a QDRO granting a former Spouse rights to any pension or 401(k) Savings Plan benefits due to divorce or legal separation, you should contact the Benefit Plans Office for required procedures and information.
Canceling Spouse Coverage: Divorce, legal separation, or annulment is a Qualifying Life Event. You must cancel coverage for an ex-spouse in medical, dental, and/or vision coverage within 31 days of the event, as they cease to be an eligible dependent.
COBRA for Ex-Spouse: An ex-spouse is eligible to continue medical, dental, and vision coverage for up to 36 months through COBRA following divorce.
Updating Beneficiaries and Other Records: Contact Voya Financial
Do you have a comprehensive legacy plan, including:
Last Will and Testament
Power of Attorney
Healthcare Directive
Living Will
Are your current beneficiaries on file with Pentax up to date? Are they the same as beneficiaries in your other accounts? If not, why?
Have you talked to your spouse or designated beneficiary about the benefit options available to them and how they work?
Would naming a trust or contingent beneficiary create complications for your estate or opportunities to secure and grow your Real Wealth for future generations?
How do your survivor’s benefits complement the rest of your legacy plan?
What survivor options should you elect for your pension to balance lifetime income and spouse protection?
Should you consider life insurance to complement your survivor benefits?
Review the beneficiary designations on your Pantex 401(k), pension, and any other retirement or investment accounts to ensure they reflect your current wishes. Confirm whether spousal consent is required for any changes and understand how default payouts would occur if no valid beneficiary is listed. It’s also important to consider how survivor benefits, divorce provisions, and estate planning documents work together to support your long-term goals.
If you’d like guidance coordinating your beneficiary strategy with your broader retirement and legacy plan, reach out to Keith Demetriades, CFP®, CKA®, a financial advisor specializing in Pantex retirees.