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Overview of Voluntary Early Retirement Authority (VERA),
Voluntary Separation Incentive Payments (VSIP), and
Reduction in Force (RIF)
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What We Will Cover
Overview on:
– Purpose of VERA and VSIP authorities
– Eligibility criteria
– Reduction in force process
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Purpose of VERA and VSIP
• Both VERA and VSIP are tools to implement management decisions when an agency must reduce or restructure its workforce
• Incentivize voluntarily separations to avoid or lessen the impact of reductions in force
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Basis for Agency VERA Request
The agency or component:
– Is undergoing substantial delayering, reorganization, reductions in force, transfer of function, or other restructuring
– Will likely separate or downgrade a significant percentage of employees or
– Identified positions that are becoming surplus or excess to the agency mission
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Agency Decisions
The agency decides:
– What positions will be covered by the VERA
– When to offer
– How long to offer
– How many may retire
– Criteria for approving applications if too many employees apply
– Latest date(s) for VERA separations (within approved authority period)
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VERA Eligibility
• Must have at least 20 years of service and age 50+ or have 25 years of service at any age
– CSRS – 1/6 per month or 2% per year permanent annuity reduction for each year under 55
– FERS – No reduction
• Must have been on the agency’s rolls at least 31 days before the VERA request
• Must occupy a position covered by the approved agency plan
• Must retire by the agency-specified date
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VERA Eligibility
• Must not have received a notice of involuntary separation for misconduct or performance
• Must not be serving on a time-limited appointment
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VERA Laws and Regulations
• Civil Service Retirement System (CSRS)
– 5 U.S.C. 8336(d)(2)(D)
– 5 CFR 831.114
• Federal Employees Retirement System (FERS)
– 5 U.S.C. 8414(b)(1)(B)
– 5 CFR 842.213
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VSIP
• Agency determines the amount to pay
– Must be lesser of VSIP amount (not to exceed $25,000) or the employee’s severance pay amount
• OPM approves agency headquarters request with OMB concurrence
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Basis for VSIP Request
• Agency plan outlining the intended use of VSIPs, including a proposed organizational chart showing organizational goals after completion of the VSIPs
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Agency Decisions
• Number and maximum amount of VSIPs
• The specific positions and functions to be reduced or eliminated (includes positions that will be restructured once vacated by VSIP)
• The categories of employees to be offered VSIPs
• Latest date(s) for VSIP separations (within approved VSIP authority)
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VSIP Eligibility
Eligible employees must:
• Be serving in an appointment without time limitation
• Be in a position covered by the agency’s VSIP plan
• Have been continuously employed by the Federal Government for at least 3 years
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VSIP Eligibility
• Employees not eligible:
– Reemployed annuitants
– In receipt of a notice of involuntary separation for misconduct or performance
– Are eligible for disability retirement
– Have previously received:
• A VSIP under any authority
• A student loan repayment within 36 months
• A recruitment or relocation bonus with 24 months
• A retention bonus within 12 months
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VSIP Law and Regulation
• 5 U.S.C. 3521 through 3525
• 5 CFR 576
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Guidance Resources
Available at www.opm.gov:
– Guide to Voluntary Early Retirement Authority
– Guide to Voluntary Separation Incentive Payments
– Workforce Reshaping Operations Handbook
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What is Reduction in Force (RIF)?
• Objective procedures that determine who stays and who goes when Federal positions are abolished
• The focus is on protecting employee's retention rights
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When is RIF Required?
• When employees will be involuntarily separated, downgraded, or furloughed due to...
– Lack of funds
– Shortage of work
– Insufficient personnel ceiling
– Reorganization ... and alternatives do not work
• Furlough duration determines if RIF or adverse action procedures apply
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Management Alternatives to RIF
• Hiring freezes, attrition, selective appointments (temporary or term appointments instead of permanent)
• Voluntary or directed reassignments to any location
• Aggressive transition/placement programs
• Voluntary Early Retirement Authority (VERA)
• Voluntary Separation Incentive Payments (VSIPs or buyouts)
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Management Decisions
• Agency management must:
– Provide the reason(s) for the RIF
– Determine the effective date
– Decide which positions to abolish
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Agency Mission
• All management decisions must consider the positions required to be retained for continued successful performance of the organization’s and agency’s mission
• For example, which positions should be:
– Excepted from a hiring freeze
– Included in VERA and/or VSIP offers
– Abolished in a RIF
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Key Terms in RIF
• These terms apply mainly to RIF
– Competitive area
– Competitive level
– Retention factors
• Positions in the competitive area are organized by competitive levels (or master retention list), then the retention factors are applied to each potentially affected employee in that competitive area
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Competitive Area
• Defines the limits within which employees compete for retention
• Defined by:
– Organization
– Geography (e.g., commuting area)
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Competitive Level
• All jobs in the competitive area grouped by
– Grade (or level) and classification series
– Duties and qualifications
– Separated by:
• Service (competitive or excepted)
• By appointing authority within the excepted service
• Pay schedule (e.g., GS or WG)
• Work schedule (e.g., full-time, part-time, seasonal)
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RIF Retention Factors in Order
Seniority
Performance ratings
Tenure
Veterans’ preference
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Tenure
• Competitive service tenure groups:
I = Career
II = Career-conditional
III = Term, Indefinite
• Excepted service tenure groups:
I = Permanent
II = Serving trial period
III = Time-limited
NOTE: Most temporary employees are in Tenure Group 0 (no RIF rights)
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Veterans’ Preference Subgroups
• Subgroup AD = Preference eligible with a 30% or more service-connected disability
• Subgroup A = Preference eligible for RIF
• Subgroup B = Not a preference eligible for RIF and non-veterans
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Length of Service
• Total civilian and military service (not just service in the agency)
• Retired military -- only service in a war or campaign or expedition is creditable, unless employee is a preference eligible for RIF
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Performance Credit
•Credit is assigned to each of the three most recent ratings of record received in the previous 4 years
•Each rating equals a number of years credit
•Rating credits are averaged, rounded up to the next whole number
– If no ratings were received during the 4-year period, a presumed rating is assigned
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Retention Standing
• Retention standing is a formula applied to each employee
• Combines the four retention factors (tenure, veterans’ preference, length of service, performance)
• Ranks each competing employee in relation to others
• Example
Career + non-veterans’ preference eligible + SCD of 06/27/77 – 12 (average of 3 fully successful ratings) = IB, 06/27/65
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Retention Register
• A retention register is a list of all competing employees in retention standing order
• May be listed two ways
– By competitive level
– By competitive area, often called an absolute or master retention register
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Round 1 Competition
• Abolished positions are noted on the retention registers in affected competitive levels
• Competition rules determine who stays in the competitive level and who is released
• Most released employees go on to Round 2
competition
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Round 1 Competition
Competitive Level 201-12
Al IAD 1/1/75 201-12W
Barb IA 2/2/72 201-12X
Carl IA 3/3/89 201-12Y
Pat IB 4/4/88 201-12Z
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Round 2 Competition
• Assignment Rights -- Competitive service employees released in Round 1 with at least a minimally successful rating may:
– Bump: Displace an employee in a lower subgroup IF qualified
– Retreat: Displace an employee in the same subgroup with less service IF held the job
before • Excepted service and tenure group III
employees have assignment rights only if granted by the agency
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Bump
• Displace an employee
– In a lower tenure group
• Group I can bump anyone in Group II or III
– In the same tenure group but lower
subgroup • AD can bump A and B
• A can bump B
• Must qualify for the position
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Retreat
• Displace an employee
– In the same tenure group and subgroup
– With less service
– If held the same job, or an essentially identical one, on a permanent basis in the Federal service
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On-line Tools for Employees
• RIF related summaries and guides available under the Employee References tab at www.opm.gov – Summary of Reduction in Force
– Summary of Reassignment
– Employee’s Guide to Reduction in Force Benefits
– Employee’s Guide to Career Transition
• Federal job listings - www.usajobs.gov
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Pam Galemore
Recruitment and Hiring
Employee Services
U.S. Office of Personnel Management