VSIP and re-employment


Q. I have four years of federal service, and I am going to take Voluntary Separation Incentive Pay because it is being offered. I am worried that if I take VSIP and apply for different job after two years, my reinstatement eligibility will be different. In the documentation, they always lump VERA and VSIP re-employment. However, I am 26 years old and would not be receiving a pension. Do you know where documentation is that states re-employment rights when just taking VSIP? How do I know I am not considered a re-employing annuitant? Technically, a payout could be considered an annuity. Since the Office of Personnel Management says the retirement plan and Thrift Savings Plan contributions change with re-employment under VSIP it might not be worth the $4,000 to risk future retirement rights.

I read another post where you said resigning and resigning under VSIP are the same for reinstatement. However, I just want to see where that is documented so I know taking VSIP is the best choice.

A. With rare exception, if you receive a VSIP and later accept employment for compensation with the Government of the United States within five years of the date of the separation on which the VSIP is based, including work under a personal services contract or other direct contract, you must repay the entire amount of the VSIP to the agency that paid it to you — before your first day of re-employment.

Moving on, you wouldn’t be an annuitant. You’d be a separated employee who wasn’t even vested in the retirement system. You would have had to be employed for five years to achieve that. Therefore, you could be re-employed by any agency that wanted to hire you. If you didn’t take a refund of your retirement contributions, you’d just be picking up where you left off. If you did, you’d need to redeposit that money, plus accrued interest, to get credit for that time.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to fedexperts@federaltimes.com.

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