Q: I am a Defense Department employee under CSRS with approximately 41 years/five months of service. My agency is offering buyouts for VSIP/VERA. I would like to take advantage of the VSIP, however, it is my understanding that because I received severance pay in the past (1992 for approximately 50 weeks due to TOF action) the $25,000 VSIP bonus will be reduced. How is this determined and what formula will I use? In using the formula, do I use my basic pay in 1991/1992 or my current basic pay?
A: The VSIP is calculated using the severance pay formula in title 5, United States Code (U.S.C.), Section 5595(c). Using this formula, any severance pay previously received must be deducted from your lifetime entitlement. The final VSIP amount is equal to $25,000 or the amount of severance pay the employee would be entitled to using this formula, whichever is less.