VSIP Amount Calculation


Q. I received $19,100.00 severance pay in a RIF in 1996. In 2000 I was re-employed by the Federal Government. I am now considering a VSIP. What amount can I expect? I am 72 years old with 20 years of service.

A. According to OPM:
An agency computes a Voluntary Separation Incentive Payment 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 [emphasis added]; or
2. An amount determined by the agency head, not to exceed $25,000.
The amount that the employee actually receives is less than the amount determined using the above computations because of the deduction of taxes, including Federal, state, social security, and Medicare, as appropriate.


About Author

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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