Shows & Panels
- The 2014 Big Picture on Cyber Security
- AFCEA Answers
- Ask the CIO
- Building the Hybrid Cloud
- Connected Government: How to Build and Procure Network Services for the Future
- Continuing Diagnostics and Mitigation: Discussion of Progress and Next Steps
- Federal Executive Forum
- Federal Tech Talk
- The Future of Government Data Centers
- The Future of IT: How CIOs Can Enable the Service-Oriented Enterprise
- The Intersection: Where Technology Meets Transformation
- Maximizing ROI Through Data Center Consolidation
- Mitigating Insider Threats in Virtual & Cloud Environments
- Modern Mission Critical Series
- Moving to the Cloud. What's the best approach for me
- Navigating Tough Choices in Government Cloud Computing
- The New Generation of Database
- Satellite Communications: Acquiring SATCOM in Tight Times
- Targeting Advanced Threats: Proven Methods from Detection through Remediation
- Transformative Technology: Desktop Virtualization in Government
- The Truth About IT Opex and Software Defined Networking
- Value of Health IT
- Air Traffic Management Transformation Report
- Cloud First Report
- General Dynamics IT Enterprise Center
- Gov Cloud Minute
- Government in Technology Series
- Homeland Security Cybersecurity Market Report
- National Cybersecurity Awareness Month
- Technology Insights
- The Cyber Security Report
- The Next Generation Cyber Security Experts
Shows & Panels
What to know before taking a buyout
Friday - 1/13/2012, 6:24pm EST
This week, alone, the Internal Revenue Service, the Agriculture Department, the National Geospatial-Intelligence Agency and the Transportation Security Administration, have all offered employees buyouts or early retirements.
But deciding to take the buyout can be a wrenching decision and largely depends on an employee's individual circumstances.
Tammy Flanagan, the senior benefits director for the National Institute of Transition Planning, joined In Depth with Francis Rose to discuss the pros and cons of taking a buyout.
Echoes of the 1990s
Flanagan said the current flurry of buyout and early-out activity reminds her of a similar period in the 1990s. But, "we're in a little bit different world today," she said, citing the economy and the number of employees, who are now covered by the Federal Employee Retirement System.
"So, I think we're going to have a lot more employees really giving this consideration," she added. "But, also [there] may be not the same job opportunities for someone who's looking to start a second career."
In a lot of cases, a buyout can be a "painless way to leave federal service," Flanagan said. Essentially, you're being paid to lose your job. And for some, the $25,000 payment can be a jumping-off point to start a new career, she said.
An opportunity for some
"You have an opportunity to leave the government possibly as much as five to 10 years earlier than you had planned, which is a much younger age to start a second career, if that's what you had wanted to do," Flanagan said.
And most who take the buyout will take their lifetime health and life-insurance coverage, their basic annuity benefits and their Thrift Savings Plan with them into their new career, she added.
"But don't jump the gun too fast," she cautioned, "because your retirement after only maybe 25 or 20 years or service might not be enough to retire comfortably."
In other words, you may have to start looking for a new career.
VERAs and VSIPs
Just how much you get determines on what exactly you're offered — and what you're eligible for.
The official name for a buyout is a Voluntary Separation Incentive Payment, or VSIP. This is "just an agency's way of giving a further incentive to get employees to consider leaving," Flanagan said.
They are often offered in conjunction with early retirements, or a Voluntary Early Retirement Authority, also known as VERA.
To be eligible for early retirement, an employee must be at least 50 years old with 20 years of service. Employees with 25 years of service can be younger than 50 and still be eligible for a VERA.
Both buyouts and early retirements offer the same general benefit: Usually, a $25,000 payment, which, after taxes, rounds out to about $16,000-$17,000.