Buyout Increase Dropped in Latest Congressional Report

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By on July 24, 2018 in Pay & Benefits with 0 Comments

Word 'buyout' overlaid against a background of financial documents, reading glasses, a pen and calculator

In Will Federal Employee Buyouts Go to $40,000?, FedSmith noted that the Senate’s version of the National Defense Authorization Act included a provision that would increase the maximum amount of buyouts for federal employees to $40,000. Currently, the maximum amount in most agencies is $25,000.

Difference in House and Senate Versions

The Senate version contained a provision to increase the maximum amount of separation pay authorized for Voluntary Separation Incentive Pay (VSIP) from the current ceiling of $25,000 to $40,000. It also included an annual adjustment in this amount based on the Consumer Price Index. The maximum amount payable under the VSIP program had not been adjusted since 2002. The amount of a buyout had been previously increased to $40,000 for the Department of Defense although the increase was only temporary.

The House version did not contain the change to increase the amount of the buyout amount.

As their were differences in the House and Senate versions of the bill, it went to a conference committee. In this process, the change in the amount as stated in the Senate bill was dropped from the bill.

The House will now begin consideration of the bill as modified in the conference report.

Pay Raise for Military Personnel?

The Senate version contained a provision authorizing a pay raise of 2.6 percent for military personnel effective January 1, 2019. The House bill did not contain a similar provision.

The House version of the bill was adopted.

But, as often happens in legislative action, the change did not kill the pay raise. Instead, the conferees noted current law authorizes automatic military pay raises consistent with the Economic Cost Index. This will result in a 2.6 percent raise in basic pay for military personnel for calendar year 2019.

What About a Federal Employee Pay Raise?

This latest Congressional action does not directly impact any federal employee pay raise for 2019. The issue of the federal employee raise is most likely to be included (or dropped) in the Senate’s 2019 Financial Services and General Government appropriations bill.

© 2019 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

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About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47

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