NOAA Workforce Management Office
Serving NOAA's Most Valuable Asset - People
Frequently Asked Questions
Voluntary Early Retirement Authority (VERA)
- What is VERA?
VERA is commonly referred to as early out retirement, and that’s exactly what this authority does. It expands the normal retirement eligibility to allow employees to voluntarily retire, with an immediate annuity, before they would otherwise be eligible. There are some basic eligibility criteria under the law. You must also meet NOAA criteria.
An early retirement may have an effect on your annuity. The VERA is separate from the Voluntary Separation Incentive Payment (VSIP) also called the buyout authority. A VERA or VSIP are not dependent or contingent on the other. NOAA and more specifically the LO/SO can offer one and not the other.
- Who is eligible for a VERA? If your LO/SO has received approval for a VERA you must also meet some additional requirements. If you are covered by the Civil Service Retirement System (CSRS), you must have served in a position covered by the CSRS for at least l year out of the 2 years immediately before retirement. For employees covered by the Federal Employees Retirement System (FERS), this rule does not apply. You must be at least 50 years of age with 20 years of service or have 25 years of service at any age. At least 5 years must be civilian service, whether you are retiring under CSRS or FERS.
In addition, you:
- Must be in a position covered by the VERA granted by the Office of Personnel Management (OPM);
- Must not be serving under a time limited appointment;
- Must have been on the agency’s rolls at least 30 days prior to the date of application to OPM for VERA approval;
- Must not have been notified that you will be involuntarily separated for misconduct or unacceptable performance; and
- Your retirement date must be on or before to the VERA expiration date.
Are Senior Executive Service (SES) members and equivalent employees eligible for the NOAA VERA?
SES members and equivalent employees (e.g. Senior Level (SL), Scientific and Technical (ST), pay band positions above the GS-15 level are not eligible.
- Are trainees eligible for VERA? Under NOAA early out plans, trainees and Presidential Management Fellows are excluded from a VERA. The definition of a trainee is based on one that is used in the Reduction-in-Force (RIF) ground rules:
Presidential Management Fellows and Fire Apprentices, regardless of the appointment authority they are hired under, are considered trainees and excluded from a VERA. Positions that are formally designated developmental (e.g., grades 5-7entry level) will also be considered as trainees and excluded from a VERA if they meet the criteria under 5 CFR 351.703(e). Two-grade interval positions are generally developmental at the GS-5-7 level but must be reviewed to ensure that formal designation is appropriate. Only those employees that are on formally designated detailed training career plans will be considered as trainees. Employees in developmental positions that do not have detailed career plans will be eligible for early out (provided they meet all other provisions of the plan). Student Career Experience Program (SCEP’s) employees are no longer considered “formal trainees” once they have converted to career appointments. 5 CFR 351.703(e) states that a formally designated trainee or developmental positions must be in a training program that meets all of the following characteristics:
- The program must be designed to meet the agency’s need for the development of skilled personnel;
- The training program must have been formally designated and announced to employees and supervisors;
- The program must offer planned growth in duties and responsibilities providing advancement in recognized career progression; and
- The program must be fully implemented with participants chosen through established selection procedures.
- Can I retire under VERA and also receive a VSIP? Yes. If you meet the criteria for both, you can retire under VERA and also receive a VSIP if one is being offered by the agency.
- If I’m eligible for VERA, what rights and benefits would I be giving up to voluntarily retire rather than waiting to be separated involuntarily? Because you would be leaving voluntarily you would be giving up:
- Placement assistance;
- Selection priority for federal employment under the Career Transition Assistance Program (CTAP) and Interagency Career Transition Assistance Programs (ICTAP). These programs give you selection priority for federal jobs in your area at your same or lower grade, if you apply for them and are well-qualified.
- Unemployment benefits (depending on your State’s rules)
If you come back to Federal employment, you would come back as a reemployed annuitant not a merit or former employee seeking reinstatement.
- If I retire under VERA and do not take the buyout, can I take a job in another Federal agency? Yes; however, you will come back as a reemployed annuitant which generally means your annuity is subtracted from the salary you earn in the new position.
- What if my agency offers a VERA but I am on military duty during the authority time limit? Employees on military duty are treated as though they were still on the job and are not disadvantaged because of their military service. If you met the eligibility criteria during the offer period, you would have 30 days following your return to duty with NOAA to either accept or reject an offer of VSIP or VERA.
- What does a "time-limited appointment” mean? An employee on an appointment with a time limit works only until a specified date and then goes off the rolls. The employing LO/SO sets the ending date when it hires the individual and/or when it extends the appointment. For example, temporary and term employees serve with a time limit, so they are not eligible for an incentive payment or early out retirement. Career and Career Conditional employees and permanent employees in the excepted service have no time limit so they may be eligible.
- What does “continuous service” mean? To be eligible for early retirement, you must have been on the rolls of the Department of Commerce 30 days prior to the request for the VERA, with no breaks in service. Leave without pay (LWOP), permanent seasonal employment (PSE) off-tour time, and other non-pay status during an appointment are NOT considered breaks in service.
- Leaving federal service under VERA is supposed to be voluntary. What if I am offered a VERA or VSIP but do not choose to leave?” Buyouts and Early Retirement are for voluntary separations AND coercion is prohibited.
- Does the VERA eligibility change the eligibility for regular optional retirement? No. If you are under CSRS, you can take regular optional retirement if you are 55 with at least 30 years of service; age 60 with 20 years of service, or age 62 with 5 years of service. If you are under FERS, you can take regular optional retirement if you have reached your minimum retirement age (MRA) with at least 30 years of service; age 60 with 20 years of service, or age 62 with 5 years of service. In addition, an employee under FERS is eligible for an immediate annuity if he/she has 10 years of service and has reached the MRA. (Under this eligibility there is a 5 percent reduction for each year the employee is under age 62.) The MRA chart can be found at the following link: http://www.opm.gov/FAQs/topic/retire/index.aspx?page=3 . An employee under CSRS must meet the 1-out-of-last-2-years coverage requirement and all employees must have at least 5 years of civilian service.
- What is the difference between VERA and discontinued service retirement (DSR)? The basic difference is simple. VERA is a voluntary separation. DSR is an involuntary separation. Generally, if your unique position is being abolished, or you refuse a directed reassignment to a position outside of your commuting area, or to a position that is more than two grade intervals below your current grade, or receive a letter of separation from the agency in a RIF, you would be eligible for an immediate annuity retirement under DSR rules if you meet the age and length of service requirements. The age and service requirements for a DSR are the same as those for VERA. The key differences come into play when/if you ever return to work for the Federal government, e.g., as a VERA retiree, you would be a reemployed annuitant with the amount of your pay will be offset by the amount of your annuity. If you were covered under CSRS and you separated under a DSR, you would not be considered a reemployed annuitant because your annuity will stop, so there would be no offset to pay. This does not apply to those covered under FERS.
- I haven't been enrolled in the federal employees health benefits (FEHB) program for a full 5-year period and I accept a VERA, do I lose my FEHB? No, OPM has granted pre-approved waivers to employees who have been covered under the FEHB Program continuously since the beginning date of the LO/SO’s approved VERA and retire under the VERA.
- I haven't been enrolled in the federal employees’ life insurance (FEGLI) program for a full 5-year period. Do I lose my life insurance when I retire under VERA? Most likely, yes; however, you could be eligible under certain circumstances or you might be able to convert your coverage. You should ask your WFMO Benefits Specialist for more information.
- If I take an early retirement, is my annuity reduced? CSRS employees who are under 55 and retire under the voluntary early retirement authority will have a reduction in their annuity of 2 percent per year for each year they are under age 55. (The reduction is 1/6 of 1 percent for each full month.) This is a permanent reduction in annuity.
- Employees with only FERS service will not have their annuities reduced under voluntary early retirement. FERS employees retiring under the MRA+10 provision are subject to a reduction of 5% for each year under age 62.
- Under DSR or early retirement, FERS employees would receive their FERS supplement if under age 62 once they reach their MRA.
- Employees with both CSRS and FERS service will have a reduction only for the CSRS portion of their annuity if under age 55.
- Special rules apply to the calculation of annuities of employees who have part-time service after 1986.
- How do I know if I have enough time in service to meet the requirements to retire? Although you can check your retirement service computation date (SCD) on your yearly statement of benefits from NFC; or on NFC’s Employee Personal Page (EPP); you should still check with your WFMO Retirement/Benefits specialist BEFORE you make a decision to accept a VERA. Seek a retirement calculation and verify that your retirement SCD is correct. Ask if you have different types of appointments; other types of federal service; or if you owe a deposit/redeposit. All of these factors can impact your SCD. The rules are complex and differ depending on your applicable retirement system. Not all service time is creditable toward retirement.
- Where can I go to get an estimate of my annuity? We encourage you to send an email to the WFMO Benefits & Retirement Division at wfmo.benefits@NOAA.gov to request an estimate; however employees that submit their VERA/VSIP request to vera.vsip @noaa.gov will have priority consideration for estimates.
- Where can I find more information on retirement benefits? Click here http://www.opm.gov/retire/index.aspx. If you have questions or need additional information contact the WFMO Benefits Division at wfmo.benefits@NOAA.gov
- What is the effective date of my retirement/separation? You may select the date of your retirement/separation based on the dates made available on the LO/SO Implantation Plan (IP). On some plans the statement "Management will try to accommodate employee preference for departure, but funding and other factors may influence buy-out decisions." This means that if you wish to separate before the listed “off-rolls” date, management may approve you to separate earlier.
- Can I delay the date of my retirement? No. An employee must retire by the date(s) established in the LO/SO VERA/VSIP Implementation plan. Each office establishes the window and off-rolls date in their IP.
- Can my retirement date be delayed by management? Management may extend your separation date when there is a documented need to retain your skills and knowledge but this is quite rare.
- Can Veterans Preference be applied to be eligible for a VERA? No. There is no preference for veterans under the VERA authority.
If I accept VERA, when will my retirement be effective? If you have been approved for a VERA, you will be able to separate during the VERA window or dates specified when the VERA is announced. Please consult your human resources office to receive an annuity estimate and obtain advice specific to your personal situation.
Civil Service Retirement System (CSRS) Annuity
- Commencing date of annuity - If you retire on the 1st, 2nd, or 3rd day of a month, annuity begins the following day. Otherwise, annuity begins the first day of the month following retirement.
- Calculation of annuity - Annuity is calculated based on the average high-3 salary and years and months of creditable service. Unused sick leave can be used for additional service credit. If the employee is under age 55, this calculation is reduced by one-sixth of one percent for each full month he/she is under age 55 (i.e. two percent per year).
Federal Employees Retirement System (FERS) Annuity
- Commencing date of annuity - Annuity begins the first day of the month following retirement.
- Calculation of annuity - FERS Basic Annuity is calculated based on the average high-3 salary and years and months of creditable service. Under FERS, unused sick leave can not be used for additional service credit, unless the employee is a FERS transferee with a CSRS component. A FERS transferee with a CSRS component receives credit for unused sick leave; the amount of credit will be the lesser of:
- The employee's sick leave balance as of the date of transfer to FERS; or
- The employee's sick leave balance as of the date of retirement.
There is no annuity reduction in FERS for employees who retire on an early voluntary retirement under age 55. A FERS Transferee with a CSRS Component in his/her annuity, who retires before age 55, will have the CSRS portion of the payable annuity reduced by one-sixth of one percent for each full month he/she is under age 55. No reduction will be applied to the FERS component of the annuity.
A FERS Annuity Supplement is payable to an employee who has completed at least one calendar year of FERS service when he/she reaches Minimum Retirement Age (MRA). MRA is age 55 to 57, depending on date of birth. The annuity supplement is payable until eligibility for Social Security begins at age 62, subject to an earnings limitation.
- Am I locked into a decision to leave when I submit the NOAA BUY-OUT/EARLY-OUT REQUEST? No, you will receive an email asking if you accept the incentives and upon your acceptance your signed application will be effected. Most LO/SOs are allowing you to change your mind until the day before you separate, check your LO/SO letter for exact information.
- Do I have to fill out additional retirement paperwork? Yes, to retire you must complete several documents provided by your Benefits Specialist.
Frequently Asked Questions
Voluntary Separation Incentive Payments (VSIP)
- What is a VSIP? A Voluntary Separation Incentive Payment (VSIP) is commonly called a buyout. The buyout program is not a retirement program. This authority allows the agency to offer a lump sum incentive payment to eligible employees who voluntarily leave the workforce, so that the workforce may be reduced in size or reshaped. You don’t have to be eligible to retire to be offered and receive a buyout.
- When is a buyout authorized? The authority for federal agencies to offer buyouts was included in the legislation that created the Department of Homeland Security (Public Law 107-296, the Homeland Security Act of 2002). Agencies must request approval from the Office of Personnel Management (OPM). The Office of Management and Budget (OMB) and OPM review the plan and decide whether to approve the request.
- Don’t I have a right to a VSIP? Agencies ARE NOT REQUIRED to use or pay incentives. Incentives ARE NOT an employee right. The incentives are a management tool to help the agency reduce the workforce without having to run costly and disruptive reduction in force (RIF). Note: In order for you to make an informed choice regarding VSIP and Voluntary Early Retirement Authority ((VERA) also called an early out), it is also necessary to understand options you may have associated with involuntary actions such as Discontinued Service Retirement (DSR), etc. This is discussed in questions below.
- What rights and benefits would I be giving up to voluntarily take a VSIP to retire or resign rather than waiting to be separated involuntarily? Because you would be leaving voluntarily, you would be giving up:
- Placement assistance;
- Selection priority for federal employment under the Career Transition Assistant Program
- (CTAP) and Interagency Career Transition Assistance Program (ICTAP). These programs give you selection priority for federal jobs in your area at your same or lower grade, if you apply for them and are well-qualified;
- Employment in the Federal Government within next 5 years (without paying back the full gross amount of the incentive payment);
- Full amount of severance pay, if eligible (e.g., you are not eligible for severance pay if you are eligible to retire);
- Unemployment benefits (depending on your State’s rules); and
- If you come back to Federal employment, you would come back as a reemployed annuitant – (under CSRS, not FERS) which would require an offset to your pay by the annuity you will continue to receive.
- Who could be offered a VSIP? There are basic eligibility requirements under the law for buyouts, and there are additional eligibility criteria established by the agency in the buyout plan and approved by OPM. Each LO/SO buyout implementation plan describes the general categories of employees that may be offered a VSIP by organizational unit, geographic location, occupational category, grade level, and other pertinent factors, such as skills or retirement eligibility.
To receive a buyout an employee must meet the criteria and accept the conditions of the specific buyout window that is offered, and must voluntarily retire (early out or optional) or voluntarily resign during the time period covered by the buyout implementation plan. Employees are not eligible to receive a buyout if any of the following apply:
- They are reemployed annuitants,
- They are eligible for a disability retirement,
- They are serving under an appointment with a time limitation,
- They have not been employed by the Federal government for three (3) continuous years,
- They are in receipt of a decision notice of involuntary separation for misconduct or unacceptable performance,
- They have received a buyout before,
- They are covered by statutory reemployment rights from another organization,
- They have received a recruitment or relocation bonus within the 24-month period preceding separation,
- They have received a retention bonus within the 12-month period preceding separation,
- They have received a student loan repayment benefit during the 36-month period preceding separation, or
- They are in a position that is not covered by the VSIP or excluded by the agency’s buyout plan.
- What does an "appointment without time limitation" mean? An employee on an appointment with a time limit works only until a specified date and then goes off the rolls. The employing agency sets the ending dates when it hires the individual and/or when it extends the appointment. For example, temporary and term employees serve with a time limit, so they are not eligible for an incentive payment. Career and career-conditional employees and permanent employees in the excepted service have no time limit so they are eligible.
- What does “continuous service” mean? To be eligible for a VSIP, employees must have been continuously employed by the Federal government for 3 years without a break in service. Leave without pay (LWOP), permanent seasonal employment (PSE) off-tour time, and other non-pay status during an appointment are NOT considered breaks in service.
- Can Veterans Preference be applied to be eligible for a VSIP? No. There is no preference for veterans under the VSIP authority.
- If I receive a buyout payment, can I take a job in another Federal agency? If you retired or resigned with a buyout payment under this law, you must repay the entire amount (including taxes paid), prior to your first day of employment, if you take a job with any agency of the Federal Government within 5 years of your separation date. This repayment requirement covers any kind of employment (permanent, temporary, expert, consultant, reemployed annuitant), as well as direct or personal services contracts. In very limited situations, the head of the employing agency may request a waiver of this repayment from OPM.
- If I’m eligible for a buyout, how much would my incentive be? Does everyone get $25,000? The amount of each employee's incentive will vary depending on his/her pay rate, years of civilian service, and age. The MAXIMUM gross amount for each buyout is $25,000, and not everyone will be eligible for the maximum. The net amount you receive will be reduced after the appropriate taxes (e.g., Social Security, Medicare, etc.) are deducted. The average estimated net is about $16,200 in the DC area.
The following are examples of employees who may receive the maximum gross buyout amount of $25,000:
- Employee making over $52,000 a year, have at least 15 years of civilian service, and are at least 43 years old;
- Employee making at least $40,000 a year, have at least 20 years of civilian service, and are at least 41 years old; and
- Employee making over $82,000 a year, have at least 13 years of civilian service at any age.
- What if I am offered a buyout but do not choose to leave? Incentives are for voluntary separations, and coercion is prohibited; however, the agency can require an employee who has committed to a buyout to follow through on that commitment.
- I retired from the military and am now a Federal employee. May I apply for a buyout?Yes, if you are otherwise eligible. The Agency will compute the incentive payment only on the basis of your civilian service and any creditable military service which interrupted civilian service and which conveyed restoration rights.
- What is the basic formula for calculating a voluntary separation incentive? Using the
severance pay calculation procedures, the amount of severance pay would be 1 week's basic pay for each of the first 10 years of your civilian service, plus 2 weeks' basic pay for each year over 10 years. An age adjustment allowance of 10% is added for each year you are over 40. (No credit is given for military service unless the service interrupted otherwise creditable civilian service and the employee returned to civilian service through the exercise of a legal restoration right.) Total severance pay may not exceed one year's pay at the rate the employee is receiving immediately before separation. The pay rate used in the calculation includes any locality and/or special pay rate you are receiving. (For the purpose of calculating a buyout payment, severance pay is figured based on the amount of your civilian service as if you would get it; you don't have to actually be eligible for severance pay.)
- When will I receive my buyout payment? Will it be all at once (lump sum) or monthly? Is it taxable? Generally, you should receive your buyout check within a couple of weeks of your final separation paycheck. The agency will send you the incentive payment as soon as possible after the date of your separation but cannot guarantee a specific date. First, the agency must resolve any leave errors, salary offsets, and employee debts to the Government. Your buyout is also subject to garnishment for alimony and child support. The incentive payment is taxable. You will receive it as a lump sum (less Federal income tax withholding, applicable State and local taxes, and FICA/Medicare taxes).
- May I roll my buyout over into an individual retirement account or another form of tax shelter? No. The buyout is considered fully taxable income and cannot be rolled over into retirement accounts.
- Are federal taxes withheld at normal tax withholding rates or a flat 25% rate? Taxes for
buyout are withheld at a flat 25% rate. Withholding taxes for the payment of your lump sum annual leave can be withheld at a flat 27% rate or at your normal tax-withholding rate. You will need to contact your Human Resources Operations Branch if you want the flat 27% rate.
- Can I retire under Discontinued Service Retirement (DSR) and also receive a buyout lump sum payment too? No. DSR is based on an involuntary separation. Buyouts are paid to employees who leave voluntarily.
- I am eligible for FERS retirement (Minimum Retirement Age (MRA) +10); however, I don’t want to retire. If I am involuntarily separated, can I receive severance pay? No. You are not eligible for severance pay if you are eligible for retirement.
- May I take a buyout and apply for disability retirement later? Employees may file for disability up to one year after separation. However, if you have received a buyout and are later found to be eligible for disability retirement, you are then responsible for repaying the entire amount of the buyout to the agency that paid the buyout to you. This is because a disability retirement is retroactive to the date of separation, and the buyout law excludes employees having a disability on the basis of which such employee is or would be eligible for disability retirement.
- I am not eligible for regular or early retirement. Which is better, buyout or severance pay? Whether buyout or severance pay is better depends on you and your personal situation. Leaving Federal service with a buyout payment is a voluntary action. If you accept a buyout, you will not receive severance pay. In general, employees who are not eligible for retirement and are separated involuntarily, and who meet other conditions are eligible for severance pay. This does not include:
- An employee serving under an appointment with a definite time limitation;
- An employee on an intermittent work schedule;
- An employee receiving compensation for work injuries; or
- Separations by removal for cause on charges of misconduct, delinquency, or inefficiency. Severance pay is paid to you at your base salary rate, each pay period (like a regular pay check), until paid in full. Leaving Federal service with a buyout payment is a voluntary action. If you accept a buyout, you will not receive severance pay. Whether buyout or severance pay is better depends on you and your personal situation.
- If your severance pay calculation is less than the $25,000 maximum buyout payment, then by accepting a buyout payment you would be accepting your full severance entitlement (if eligible) in a lump sum, less taxes and other deductions.
- If you are eligible for severance pay and the severance pay calculation is greater than the$25,000 maximum buyout payment, you will be giving up the difference if you take the buyout.
- What if I meet the eligibility criteria for buyout (VSIP) but I am on military duty during the offer period? Employees on military duty are treated as though they were still on the job and are not disadvantaged because of their military service. Therefore, if you met the eligibility criteria during the offer period, you would have 30 days following your return to duty with the agency to either accept or reject an offer of buyout and/or early out.
- I haven't been enrolled in the federal employees health benefits (FEHB) program for a full 5-year period. Do I lose my health insurance? There are two different situations. For employees who resign (those who are not eligible for immediate annuity retirement), temporary coverage continues for up to 31 days after the enrollment terminates, with conversion privileges. You would also be eligible for temporary continuation of coverage, which allows you to continue your coverage for up to 18 months. You must pay 102% of the premiums (the employee's share, plus the Government's share, plus 2 percent of the total). Employees are able to continue their health insurance into retirement, even if they have not been enrolled for a full 5-year period prior to retirement, under the following pre-approved waiver guidelines from OPM:
OPM's current waiver policy provides pre-approved waivers for any employee who has been covered under the FEHB program continuously since the beginning date of an agency's latest statutory buyout and/or early out authority. To be eligible for a pre-approved waiver, employees must:
- Retire during the agency statutory buyout period; and
- Receive a buyout under the agency statutory buyout authority; or
- Take early optional retirement as a result of early-out authority; or
- Take a DSR based on an involuntary separation due to reduction in force, directed reassignment, reclassification to a lower grade, or abolishment of position.
If you meet these requirements, you do not need to write a letter requesting a waiver. Instead, WFMO will attach a memorandum to your retirement application stating that you meet the requirements for a pre-approved waiver by OPM as set forth in revised Benefits Administration Letter (BAL) 04-208. The memorandum should provide the number of the Public Law granting your agency VSIP authority and the beginning and the ending dates of your agency's statutory buyout period.
For additional information please contact:
Tishema Miller – Tishema.C.Miller@noaa.gov (301) 713-6379
Page last edited: April 24, 2013