What is VERA?
VERA, often called an “early out,” stands for Voluntary Early Retirement Authority and allows eligible FERS employees to retire earlier than they normally could under standard retirement rules. It’s a tool agencies use during restructuring, downsizing, or other major organizational changes to reduce staff voluntarily, avoiding involuntary layoffs (like a Reduction in Force, or RIF).
Who is eligible?
To retire under VERA, you must meet one of these criteria:
- Be at least age 50 with 20 years of creditable federal service, OR
- Be any age with 25 years of creditable federal service (at least 5 years must be civilian).
Additionally:
- Your agency must have OPM approval to offer VERA (unless it’s an agency like the Department of Defense with its own authority).
- You must be in a position covered by the agency’s VERA plan and retire within the specified time window set by OPM.
Annuity Calculation
Your FERS annuity is calculated the same way as a regular retirement: 1% x years of service x high-3 average salary (or 1.1% if retiring at age 62 or later with 20+ years). Unlike some other early retirement options, there’s no age penalty for retiring early under VERA.
FERS Annuity Supplement
You’re also eligible for this supplement when you reach your Minimum Retirement Age (MRA)—between 55 and 57, depending on your birth year. It is calculated using your Social Security Benefit at age 62 and your years of creditable federal service.
Benefits
You can carry over health insurance (FEHB) and life insurance (FEGLI) into retirement if you’ve been enrolled for the 5 years before retiring (or since your first opportunity to enroll). Unused sick leave counts toward your service credit (100% since 2014). Annual leave is paid out in a lump sum.
Voluntary Separation Incentive Payment (VSIP)
What is it?
VSIP, often called a “buyout,” is a lump-sum payment to encourage employees to leave federal service voluntarily—either by retiring (including under VERA) or simply resigning. It’s another workforce management tool for agencies facing downsizing or restructuring.
Basic Eligibility Requirements
- You must have been employed by the federal government for a continuous period of at least 3 years
- You must be in a position targeted by your agency’s VSIP plan (specific job, grade, or location)
- You must not be in a time-limited appointment or facing involuntary separation for misconduct/performance issues
- Must not be a reemployed annuitant
Payment Amount
The lump sum is typically up to $25,000 (gross, before taxes—net is closer to $18,000-$19,000, depending on your tax situation). For Department of Defense employees, it can be up to $40,000. The payment is fully taxable and cannot be rolled into a retirement account like the TSP or an IRA.
Repayment Rule
If you return to federal employment within 5 years of receiving VSIP, you must repay the full amount (unless waived by OPM, e.g., for emergency rehire).
Have you been offered VERA/VSIP?
United Benefits has assisted thousands of federal employees with these and other retirement options. Offers have specific windows (set by OPM), so you must act fast if eligible!
Fill out the form below to request a consultation and talk one-on-one with a representative about your options.