Q. I am eligible for the Voluntary Separation Incentive Pay and plan on taking it. However, I recently finished buying back my military time, to put toward my federal retirement. Would I have been able to calculate my military service into my VSIP if I did not buy it back? If so, did I just waste my money by buying back my military service, and is there anyway to get that money back?
A. Your agency will compute that VSIP on the basis of the lesser of: An amount equal to the amount of severance pay you would be entitled to receive, as computed under 5 U.S.C. 5595(c), without adjustment for any previous payment made; or an amount determined by the agency head, not to exceed $25,000.
If you accept the VSIP and are also retiring, the active-duty service for which you made a deposit will be included in your annuity computation. If you aren’t eligible to retire, you can apply for a deferred retirement at age 60 (if you have at least 20 years of combined service) or 62 (if you have less than 20 years).
While you cannot receive a refund of your military service deposit alone, you can request a refund of all of your contributions to the retirement fund. However, if you do, you will void all future entitlement to retirement benefits.