Retirement Options for RIF'd Federal Employees

For those who are nearing retirement, a RIF can be a turning point. It can open up opportunities for early retirement that might not have been available otherwise.

Understanding these specific retirement options is essential for making a sound decision.

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Now, let's dive into the specific retirement options you need to know about.

Discontinued Service Retirement (DSR)

A DSR is an involuntary retirement option specifically for employees who are separated due to a RIF or other involuntary reasons.

• Eligibility: You must have been involuntarily separated (not "for cause") and meet one of the following criteria:

  • Age 50 with at least 20 years of creditable service.

  • Any age with at least 25 years of creditable service.

• Key Consideration: If you decline a reasonable offer of another position (defined as being in the same commuting area and no more than two grades lower), you may forfeit your right to a DSR.

Voluntary Early Retirement Authority (VERA)

In some cases, an agency may receive VERA from OPM to offer voluntary early retirement to its employees. This is often done to avoid a RIF.

• Eligibility: The eligibility criteria are the same as for DSR: Age 50 with 20 years of service, or any age with 25 years of service.

• The Difference: The key difference is that VERA is a voluntary offer. The agency is giving you a choice to retire early, whereas a DSR is a retirement option triggered by an involuntary separation.

Voluntary Separation Incentive Payment (VSIP), or "Buyout"

A VSIP is a lump-sum payment offered by some agencies to encourage employees to voluntarily separate. It's often used in conjunction with VERA to reduce the workforce and avoid a RIF.

• Eligibility: The criteria vary by agency and are defined by the specific authority granted.

• Key Consideration: The VSIP is generally up to $25,000 (the amount can vary) and requires the employee to sign an agreement not to return to federal service for a specified period, typically five years.

Deciding to retire is a monumental decision. It's crucial to get a retirement estimate from OPM and consult with a financial professional to fully understand the long-term implications of any of these options.

Disclaimer: The information provided in this blog is for educational purposes only and is not a substitute for professional legal or financial advice. We encourage all federal employees to consult with their agency's Human Resources department, a legal professional, or a certified financial planner to discuss their specific situation.