VERA and annuity reduction

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Q. I am planning to retire Feb. 21, 2014. I will be 60 years old and will have completed 10 years and one month of service. I am prepared to take the permanent reduction for being under age 62.

1. If a Voluntary Early Retirement Authority/Voluntary Separation Incentive Pay is offered at the time of my planned retirement, would I qualify for one or both?

2. I was told that if a VERA/VSIP is offered at the time of my retirement, I could approach my leadership and ask that the 10 percent reduction be waived. I believe this was because I would be fully eligible, so the VERA would not be applicable. Is this true?  If so, how do I approach this?

A. Yes, if a VERA or VSIP was offered, you could accept it. However, if you did, it wouldn’t affect the 5 percent-per-year age penalty. That waiver only applies to early retirees who are age 50 with 20 years of service or at any age with 25. Since this is a matter of law, your agency would have no say in it.

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  1. This answer is incorrect. You would not be eligible for a VERA (early retirement) because you don’t have at least 20 years of service. Since you will have at least 10 years of service when you retire at age 60, you will be retiring under the FERS MRA+10 option, and there is no way to avoid the 10% reduction in your annuity (5% x 2 years under age 62).

    It’s also not true that you must be exactly 50 years old with exactly 20 years of service or any age with exactly 25 years to qualify for a VERA – those are the MINIMUM requirements. If you were eligible for both the FERS MRA+10 and a VERA, you could apply for the VERA to avoid the 5% deduction for each year under age 62 and to receive the special supplement after your MRA. I know this is true because I did it (retired under VERA at 57 with 28 years).

    You can retire or resign to get the VSIP (buyout) if you qualify.

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