The Voluntary Separation Incentive Payment (VSIP) Authority, also known as buyout authority, allows agencies that are downsizing or restructuring to offer employees lump-sum payments up to $25,000 as an incentive to voluntarily separate. When authorized by the Office of Personnel Management (OPM), an agency may offer VSIP payments to employees who are in surplus positions or have skills that are no longer needed in the workforce who volunteer to separate by resignation, optional retirement, or by voluntary early retirement, if approved. By allowing employees to volunteer to leave the Government, agencies can minimize or avoid involuntary separations through the use of costly and disruptive reductions in force (RIFs). Some agencies have been granted agency-specific VSIP authority and are not required to seek OPM approval for their use of this option.
Employees in the following categories are not eligible for VSIP.
Are reemployed annuitants;
An agency computes a Voluntary Separation Incentive Payment on the basis of the lesser of:
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.
As with any incentive, when approved by OPM, this authority is used at the discretion of the agency. Each agency must develop a VSIP plan to describe why the program is needed, how it will be implemented, and which employees will be eligible.
An employee who receives a VSIP and later accepts employment for compensation with the Government of the United States within 5 years of the date of the separation on which the VSIP is based, including work under a personal services contract or other direct contract, must repay the entire amount of the VSIP to the agency that paid it - before the individual's first day of reemployment.
If the proposed employment is with an agency other than the General Accounting Office, the United States Postal Service, or the Postal Rate Commission, the Director of the Office of Personnel Management may at the request of the head of the agency, waive the repayment if: