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1. What are Voluntary Separation Incentive Payments? Why are Federal agencies offering them?
Separation incentive payments are also known as buyouts. A buyout is a lump sum payment made by an agency to surplus or displaced employees who volunteer to resign or retire to help the agency achieve its restructuring goals. Buyouts are a more effective, less expensive, and more humane way to reduce or restructure the workforce while minimizing or reducing the need to involuntarily separate employees.
2. Does the new law change eligibility for retirement?
No. If you are under the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (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. If your agency offers early retirement, you must be at least 50 with 20 years of service or have 25 years of service at any age. An employee under FERS also is eligible for an immediate annuity if he/she has 10 years of service and has reached the minimum retirement age (55 if born before 1948, and gradually increasing to 57). An employee under CSRS must meet the 1-out-of-last-2 year's coverage requirement and all employees must have at least 5 years of civilian service.
3. Who is eligible to apply for an incentive payment under the new law?
Employees are eligible if they voluntarily resign or retire under conditions established by their agency and meet other requirements of the applicable law. You can apply if you:
- receive a buyout offer during a timeframe established by your agency and approved by the Office of Personnel Management in consultation with the Office of Management and Budget;
- accept the buyout offer; and
- voluntarily retire, retire under voluntary early retirement, or voluntarily resign during the approved buyout window.
- are a reemployed annuitant;
- have a disability on the basis of which you would be eligible for a disability retirement;
- are serving under an appointment with a time limitation;
- have not been on-board with the agency without a break in service for 3 continuous years;
- are in receipt of a specific notice of involuntary separation for misconduct or unacceptable performance;
- have received a buyout before but have not repaid it in full;
- are covered by statutory reemployment rights from another organization;
- have received a recruitment or relocation bonus within 24 months of separating to receive a buyout ;
- have received a retention bonus within 12 months of separating to receive a buyout;
- are a reemployed annuitant; or
- are in a position your agency has excluded.
4. 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 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. Career and career-conditional employees and permanent employees in the excepted service have no limit so they are eligible.
5. What does "continuous service" mean?
To be eligible for an incentive payment, you must have 3 years of continuous service at the same agency with no breaks. Going off the rolls for even 1 day is a break in service and would disqualify you for an incentive payment. All 3 continuous years must be in the agency which is offering the buyout.
6. I retired from the military but am now a civilian employee. Can I apply for a separation incentive?
Yes, if you are otherwise eligible. The agency will figure the incentive payment only on the basis of your civilian service.
7. When is the earliest I can leave with an incentive payment? When is the latest?
The timeframe is contingent upon the buyout window requested by the agency and approved by the Office of Personnel Management in consultation with the Office of Management and Budget
8. If I meet all the requirements, do I automatically get an incentive payment if I leave? What if my agency gets more requests for incentive payments than are necessary to meet its reduced staffing targets? How will it decide which requests to approve?
You are eligible to apply for an incentive payment if you meet all the requirements set by the law and your agency. Agencies may exclude certain jobs or units from the incentive payment offer. In handling applications, the agency must use a fair and objective method to determine the order in which applications will be approved.
9. How much will I get if I separate for an incentive payment?
An incentive payment is the amount of severance pay you would get, or $25,000 (or an amount set by the agency head) -- whichever is less. Severance pay is figured as if you would get it; you don't have to be eligible for severance pay. (Severance pay is normally only for people who separate involuntarily. Leaving Federal service with an incentive payment is a voluntary action.)
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.)
10. When will I receive my incentive payment? Will it be all at once (lump sum) or monthly? Is it taxable?
The incentive payment will be sent as soon as possible after the date of your separation. Because we must first resolve any leave errors, salary offsets, and employee debts to the Government, we cannot guarantee a specific date. Payment 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 tax withholding, applicable State/local taxes, FICA/Medicare).
11. Do I have to make a commitment to leave if I accept an incentive payment?
You will be asked to sign an agreement with your agency which says that, in exchange for an incentive payment, you agree to resign or retire on a specific date. When employees change their minds, the agency might not be able to meet its downsizing goal. The separation is voluntary and generally can be withdrawn by the employee at any time prior to separation, except in limited circumstances.
Employees are urged to take the application for an incentive seriously and be prepared to separate on the agreed date in the event that the agency has a valid reason to deny the employee's request to withdraw the buyout agreement.
12. What does the incentive payment agreement say?
The agreement says that you agree to leave by a certain date in return for the incentive payment. It also says that if you accept an incentive payment and subsequently become reemployed with the Government of the United States, in either a temporary or permanent status or under a personal services contract, for 5 years following the effective date of your separation, you will be required to repay the full amount of the incentive payment prior to your first day of employment.
13. What rights and benefits would I be giving up to take an incentive payment to retire or resign rather than a RIF separation?
- Selection priority under the Career Transition Assistance and Interagency Career Transition Assistance Programs;
- Placement assistance;
- Taking a job in Government within next 5 years without paying back the incentive payment;
- Full amount of severance pay (if eligible);
- Discontinued Service Retirement.
14. May I take a Discontinued Service Retirement, the lump-sum refund of retirement contributions, and an incentive payment?
No. Incentives are paid to employees who leave voluntarily. The lump-sum refund is available only to employees who were separated involuntarily no later thanSeptember 29, 1994, or who have a critical medical condition. Discontinued Service Retirement is based on an involuntary separation.
15. If I leave with an incentive payment, can I take a job in another Federal agency? Am I eligible for placement assistance?
If you have retired or resigned with an incentive payment under this law, you must repay the entire amount of the incentive if you take a job with the Federal Government within 5 years of your separation date with the incentive payment. This repayment requirement covers any kind of employment (for example, permanent, temporary, expert, consultant, reemployed annuitant) as well as personal services contracts.
You are not entitled to any placement assistance or selection priority because employees volunteerto leave Federal service with an incentive payment. Placement assistance is for employees who are involuntarily separated.
16. Can the agency delay my separation until after the "window" and still give me an incentive payment when I leave?
No. To receive an incentive payment the effective date of your resignation or retirement must be during the agency's approved window period.
17. Leaving Federal service with the incentive payment is supposed to be voluntary. If I'm eligible but don't choose to leave, can my agency retaliate by moving me to another position?
Incentives are for voluntary separations. Coercion is prohibited. However, after the window closes, later restructuring could mean the agency would have to reassign or even separate employees. To take these actions agencies would have to follow requirements of law, regulation, and applicable negotiated procedures.
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