Retirement Compensation Benefits

Voluntary Separation Incentive Payments (VSIP) for Federal Employees

By Kimberly H. Berry, Esq., 

We often receive questions from federal employees about Voluntary Separation Incentive Payment (VSIP) programs.  A VSIP, also commonly known as a buyout, is a lump-sum payment of up to $25,000 that is offered to eligible federal employees as an incentive to voluntarily separate by resignation, optional retirement, or early retirement.  When a federal agency is downsizing or restructuring, it may offer a VSIP to eligible employees who are no longer needed in the workforce. Federal employees who are offered a VSIP must meet general eligibility requirements in order to take advance of these provisions.  

VSIP Eligibility Requirements

The federal employee involved must:

(1) Be serving in an appointment without time limit;

(2) Be currently employed by the Executive Branch of the federal government for a continuous period of at least three (3) years;

(3) Be serving in a position covered by an agency VSIP plan; and

(4) Apply for and receive approval for a VSIP from the agency making the VSIP offer.

Federal employees in the following types of categories are generally not eligible for VSIP.  These include federal employees who:

Are reemployed annuitants; Have a disability such that the individual is or would be eligible for disability retirement; Have received a decision notice of involuntary separation for misconduct or poor performance; Previously received any VSIP from the federal government; During the 36-month period preceding the date of separation, performed service for which a student loan repayment benefit was paid or is to be paid;

During the 24-month period preceding the date of separation, performed service for which a recruitment or relocation incentive was paid or is to be paid; and During the 12-month period preceding the date of separation, performed service for which a retention incentive was paid or is to be paid.

Return to Federal Service After VSIP

If a federal employee receives a VSIP and later accepts employment for compensation with the federal government of the United States—other than the General Accounting Office, the U.S. Postal Service, or the Postal Rate Commission—within five (5) years of the date of the separation on which the VSIP is based, including any work under a personal service contract, the employee must repay the entire amount of the VSIP to the paying agency before his or her first day of reemployment.

Contact Us

It is very important for federal employees considering VSIP as an option to obtain legal advice from an attorney regarding the VSIP process prior to making final decisions concerning their federal employment or reemployment. Berry & Berry, PLLC represents and advises federal employees nationwide and abroad before their individual federal agencies, the Office of Personnel Management (OPM), and the Merit Systems Protection Board (MSPB) in regard to issues arising under the Voluntary Separation Incentive Payment (VSIP).  If you need legal assistance or advice regarding VSIP payments, please contact our office at (703) 668-0070 or at to schedule a consultation. 


New Thrift Savings Plan (TSP) Options for Federal Employees

By Kimberly H. Berry, Esq.,

The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees and members of the uniformed services. It was established by Congress in 1986 as part of the Federal Employees’ Retirement Systems Act. The TSP offers the same types of savings and tax benefits that a 401(k) plan offers to private sector employees of companies. In April 2017, on the TSP’s 30-year anniversary, a bill was offered by Senators Rob Portman (R-Ohio) and Thomas R. Carper (D-Del) to bring the TSP’s terms more up-to-date with similar programs. Specifically, the legislation seeks to expand investment and withdrawal options.

Recent Developments for TSP

Recently, the Washington Post published a helpful Q&A that provided more details regarding the TSP’s new investment options. For instance, one of the TSP’s five funds, tracking international stocks, will be broadened in 2019 to include emerging markets and Canada. The TSP is also working towards allowing account holders to invest in funds outside of what’s currently offered. Additional bills pending before Congress also allow for more withdrawal options post-retirement, including for federal workers and servicemen and women still employed and at least 59 ½ years of age. Since current withdrawal options are limited, it is hopeful that these changes will allow participants more flexibility and freedom regarding their retirement savings.

Most TSP issues that we handle in our federal retirement practice involve withdrawal guidelines and requirements, including issues involving federal retirees who are divorced and ordered to divide their retirement benefits, including TSP benefits, with a former spouse. In addition, federal employees and uniformed servicemen and women leaving employment for retirement or other reasons may keep TSP accounts open. However, they cannot add to their TSP accounts post-retirement or separation, but TSP monies can be transferred to an IRA or other tax-favored plans. The transfer rules, including deadlines, can often be complicated and difficult to understand, but we hope that the legislation allowing for additional investment and withdrawal options will help bring more financial stability as well as a better understanding of the rules involving federal retirement plans.


If you need assistance with a federal employment, federal retirement or TSP issue, please contact our office at 703-668-0070 or at to schedule a consultation. Please also like and visit us on Facebook at Facebook.