vonHardenberg: As Swampland said, the items a pawn holds are returned to storage upon death. The only exception is if you equip an item on a support pawn (usually only done to gift weapons and armor to someone).

One of the more interesting applications is to load down a pawn until it can barely walk, then toss it off a cliff - the stuff gets transferred to your storage, and the rest can contine with a much lighter load.

Besides falling off cliffs or drowning, there are a few other instakills that will remove the pawn from your party, like Death's scythe attack. In those cases, you cannot resurrect the pawn, but will need to re-hire it. Your own pawn will pop out of the next riftstone you encounter, though.