Voluntary Separation Incentive Payments (Buyouts) and Early Retirement Authorization Date: Wed, 27 Aug 1997 14:15:10 -0400 To: "USGS Employees" From: Associate Director for Operations Subject: Buyout Information Mime-Version: 1.0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable In Reply Refer To: Mail Stop 102 MEMORANDUM To: All U.S. Geological Survey Employees From: Barbara J. Ryan Associate Director for Operations Subject: Voluntary Separation Incentive Payments (Buyouts) and Early Retirement Authorization Public Law 104-208 authorizes certain executive branch agencies to offer voluntary separation incentive payments (buyouts) to employees who take regular or early retirement or resign on or before December 30, 1997. In addition, the Office of Personnel Management has approved a voluntary early retirement authority for the Department of the Interior through December 30, 1997. These programs are intended to assist us in achieving targeted reductions, streamlining agency operations, and avoiding involuntary separations. We will authorize payments of voluntary separation incentives to a maximum of 500 eligible employees, with several important restrictions. The buyout opportunities are not available to all employees; each division/office has a plan, the details of which will be provided separately. All employees receiving a buyout must separate from the rolls during the period October 1 - December 30, 1997. The USGS will consider all applications for buyout to be binding on employees, and we are prepared to enforce a commitment to separate for all employees whose applications are approved. This means that your election will be considered irrevocable, and we will not honor a request to withdraw an application once it has been approved. You should apply ONLY if you are prepared to separate from Federal service. An application form is provided at Attachment 1. Buyouts will be offered and approved consistent with our buyout plan approved by the Office of Management and Budget. More detailed information on eligibility requirements will be forthcoming from your division/office. Within the organizational, occupational, and geographic constraints specific to each division/office, priority consideration for buyouts will be offered to retirement eligibles, early retirement eligibles, and resignation eligibles, in that order. An employee is not eligible to receive a buyout if the employee: is a reemployed annuitant; has a disability on the basis of which the employee would be eligible for a disability retirement; is serving under an appointment with a time limitation; has not been on board with the Federal Government without a break in service for 3 continuous years; is in receipt of a specific notice of involuntary separation for misconduct or unacceptable performance; has received a buyout before but has not repaid it; is covered by statutory reemployment rights from another organization outside the USGS; has received a recruitment or relocation bonus within 24 months of separating to receive a buyout; has received a retention bonus within 12 months of separating to receive a buyout. Computation of Amount of Incentive Payment The separation incentive is paid in a lump sum (less the usual required withholdings for Federal and State taxes, Social Security, Medicare, etc.). The amount of the incentive will be either $25,000 or the amount of your severance pay entitlement, whichever is less. Severance pay equals 1 week of basic pay for each of the first 10 years of creditable Federal service, plus 2 weeks of basic pay for each year of creditable service over 10 years. Employees receive an additional 10 percent for every year over the age of 40. Special Conditions Which Apply to Incentive Payments If you accept a buyout, certain conditions will apply to you: you cannot also receive severance pay or placement assistance; you cannot elect the alternative form of annuity (lump sum payment of retirement contributions), which is available only to those who retire on disability; you cannot rejoin the Federal Government for 5 years, either as an employee or under a personal services contract, unless you repay the entire amount of the incentive to the agency that paid the incentive prior to your first day of work at the new job. Waivers are not allowed under this law. you must sign an agreement that your separation is entirely voluntary and that you agree to repay the incentive if you are reemployed by the Federal Government within 5 years of your separation. Application Procedures If you are interested in being considered for a voluntary separation incentive payment (VSIP) and you are prepared to separate during the window(s) established by your division/office, you must file the VSIP application (Attachment 1) with your servicing personnel office by September 19, 1997. If all buyout slots are not used during this application period individual divisions/offices may extend the application deadline on a first-come, first-served basis. I want to emphasize that application for early retirement, optional retirement, or resignation is entirely voluntary. The USGS will provide you with as much information as possible to help you make this important decision. The fact sheet at Attachment 2 briefly describes the eligibility criteria for optional and early retirement and provides information for a quick computation of your annuity. In addition, the personnel office staff identified at Attachment 3 can provide more accurate estimates of severance pay and retirement annuities. Retirement and benefits counseling will be provided on a priority basis to employees eligible for the buyout under applicable division/office guidelines. Since we have no indication that additional authorizations will be approved by Congress, we hope that interested employees' buyout applications can be accommodated. However, please remember that buyouts are a tool for agencies to use to manage and control staffing levels and that they are not an employee entitlement. We will use separation incentives to reduce the negative impact of reorganizations and budget shortfalls, but we must also take care to ensure the strength and viability of the USGS into the future. 3 Attachments Attachment 1 APPLICATION TO SEPARATE WITH A VOLUNTARY SEPARATION INCENTIVE PAYMENT (BUYOUT) I hereby request to separate from USGS employment with a voluntary separation incentive payment. The effective date of my separation is __________________________________, subject to USGS approval. My decision to separate with a voluntary separation incentive payment is entirely voluntary and has not been coerced. I understand that my election to separate with a voluntary separation incentive payment will be considered irrevocable by the USGS and that a request to withdraw my application will be denied, once my application is approved. I understand that if I separate with a voluntary separation incentive payment, I am responsible for repaying the entire incentive payment to the USGS before my first day of work if I am reemployed by the Federal Government in the next 5 years, either by appointment or by personal services contract. I also understand that this requirement cannot be= waived. If I am retiring, I will submit my application to retire to my servicing personnel office not later than 1 month before my retirement date. __________________________________________________________________ Signature Date _________________________________________ __________________________ Print Name Social Security Number _________________________________________ Address (Office or Home) _________________________________________ Telephone Number (Office) Attachment 2 ELIGIBILITY FOR OPTIONAL RETIREMENT CSRS/CSRS Offset =96 To be eligible for optional retirement, an individual covered under the Civil Service Retirement System (CSRS) must be 55 years of age with 30 years of service; 60 years of age with 20 years of service; or 62 years of age with 5 years of service. FERS =96 Individuals under the Federal Employees' Retirement System (FERS) are eligible for optional retirement if they meet the minimum retirement age (MRA) with 10 years of service (the MRA is 55-57, depending on year of birth); age 55 with 30 years of service; age 60 with 20 years of service; or age 62 with 5 years of service. The annuity of a FERS employee who retires at the MRA with at least 10 but less than 30 years of service will be reduced at the rate of 5 percent a year for each year the individual is under age 62, unless the employee has 20 years of service and the annuity begins at age 60 or later. ELIGIBILITY FOR EARLY OUT RETIREMENT To be eligible for early out retirement, both FERS and CSRS employees must be age 50 with 20 years of service or any age with 25 years of service. Under CSRS, the annuity of an early out retiree is reduced 2 percent a year for each year the retiree is under age 55. Since the annuity of a FERS-conversion retiree is based on both CSRS and FERS components, this means that the reduction applies only to the CSRS portion of the annuity=96not the FERS portion. COMPUTING ANNUITIES The amount of your basic annuity is based on a percentage of your "high 3" average salary. Your "high 3" average salary is the highest 3 years of base pay or salary you earned in any consecutive 3-year period (usually your last 3 years). CSRS FORMULA* 1.5 percent x high-3 x 5 years, plus 1.75 percent x high-3 x 5 years, plus 2 percent x high-3 x number of years of creditable service in excess of 10 equals the basic annuity CSRS SHORTCUT FORMULA* (Length of service in years, minus 2) x .02 x high-3 =3D basic annuity FERS FORMULA* 1 percent x high-3 x all years of FERS service =3D basic annuity OR If age > 62, 1.1 percent x high-3 x all years of service =3D basic annuity *None of these formulas account for an age reduction or for the election of a survivor annuity. NOTE: Employees on part-time work schedules cannot rely on these formulas; contact a retirement specialist for assistance. Attachment 3 POINTS OF CONTACT FOR RETIREMENT/BENEFITS COUNSELING Judy Huffman (703) 648-7428 All employees serviced by the Cynthia Wylie (703) 648-7429 Headquarters Personnel Office TTY Line (703) 648-7788 601 National Center Reston, Virginia 20192 Dian Reeves (770) 409-7752 All employees serviced by the TTY Line (770) 7750 Southeastern Region Personnel Spalding Woods Office Park, Suite 160 Office 3850 Holcomb Bridge Road Norcross, Georgia 30092=09 Emily Alexander (303) 236-5900 All employees serviced by the TTY Line (303) 236-5852 Central Region Personnel Office Bldg. 25, Denver Federal Center Box 25046 Denver, Colorado 80225 Susan Murphy (415) 329-4110 All employees serviced by the Michele Bollier (415) 329-4096 Western Region Personnel Office TTY Line (415) 329-4123 =09 345 Middlefield Road Menlo Park, California 94025=0C