VSIP and severance pay


Q. I have been approved for a Voluntary Separation Incentive Pay and, on the letter, it asked me if I ever received severance pay. I did when my Defense Department position at the base I worked closed in 1996. I received eight weeks of severance pay. I was put on priority placement and accepted a position in DoD in August 1997. I have worked the same position since. What, if anything, does my severance pay have to do with the VSIP payout. Does the amount get reduced by the severance pay I received at the other DoD position?

A. According to the Office of Personnel Management, “An agency computes a VSIP on the basis of the lesser of:

(1) An amount equal to the amount of severance pay the employee would be entitled to receive, as computed under 5 U.S.C. 5595(c), without adjustment for any previous payment made; or

(2) An amount determined by the head of the agency, not to exceed $25,000.”


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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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