Your buyout can be less than $25,000.
The buyout (VSIP, or Voluntary Separation Incentive Pay) is payable for resignation/retirement from specified jobs within certain agencies only with approval from the Office of Personnel Management (OPM). It is calculated the same way severance pay is calculated, with an important difference: severance pay can be as much as a full year’s salary, while the VSIP money is capped at $25,000.
To understand how the buyout pay can be less than $25,000, you need to know how it is calculated. The basic amount is one week’s pay for each of the first 10 years of Federal civilian (not military) service, plus two weeks’ pay for each year above 10. Each 3 months = one quarter of a year’s payment, with service rounded down to the nearest quarter.
Age bonus. The age bonus is 10% of the basic amount for each full year over 40, with the same 3-month proration (i.e., 2.5% of the basic amount for each quarter).
Here are four examples for an employee making $60,000 annually (weekly = $1,149.97):
|Age||Years||Basic Amount||Age Bonus||Total||26||4.25||$4,887||0||$4,887||36||14.5||$21,850||0||21,850||41||19.75||$33,924||$3,392||$25,000 MAX||46||24||$43,699||$26,219||$25,000 MAX|
Note: one week’s pay is: (annual salary / 2,087) * 40
So, be advised: it is possible for the buyout to be less than $25,000. Clearly, once an employee hits 40, the number increases faster!
To get a fast, accurate calculation, go to fedbens.us and click no. 2 on the menu.