Voluntary Separation Incentive Payments (VSIP)

By Cheryl Brown,2014-04-06 20:02
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Voluntary Separation Incentive Payments (VSIP)




PERSONNEL LETTER: 576-1 DATE: October 19, 2006

SUBJECT: Voluntary Separation Incentive Payments (VSIP)


This Personnel Letter -

    ; Describes the rules and Bonneville Power Administration’s (BPA) policy for

    using Voluntary Separation Incentive payments under the government-wide

    authority administered by the Office of Personnel Management (OPM).

    ; Replaces Personnel Letter No. 351-4 (Revised) dated March 1, 2000, which is

    abolished and which had described the rules governing payments under BPA’s

    own VSI legislative authority that has expired.


    The VSIP is used as a tool to assist BPA in restructuring work, reducing staffing levels, addressing skill gaps and reducing or eliminating the need for involuntary separations due to downsizing. BPA’s VSIP policy provides procedures and guidance on coverage, responsibilities, eligibility, restrictions, timeframes and limitations of implementation of the VSIP authority.

    BPA Personnel Letter 576-1

    Human Capital Management

    October 2006



    Federal employment as defined in Title 5 to include full-time, temporary,

    permanent, expert, consultant, reemployed annuitant, as well as personal

    services contracts.

     Human Capital Management:

    A contract that, by its expressed terms or as administered makes contractor

    personnel subject to the relatively continuous monitoring and contract

    surveillance of a government officer or employee.

Reemployed Annuitant:

    A retiree of the Civil Service Retirement System or the Federal

    Employees’ Retirement System who is reemployed in the Federal Service.

Voluntary Separation Incentive Pay:

    A lump-sum amount paid to an employee after his/her voluntary

    separation by resignation or voluntary early or regular optional retirement

    at the time of the employee’s separation from Federal service.


A. Chief Operating Officer

    1. Approves specific VSIP offerings or windows that are consistent with

    the parameters of an authorization received from OPM.

    2. Through the Labor Relations Officer, consults or negotiates with

    bargaining units on establishing local policies and procedures for

    offering separation incentive pay.

B. Chief Human Capital Management Officer, through staff

    1. Develops and advises on policies and procedures for using separation


    2. Maintains data related to separation incentives for use in tracking and


C. Manager, Employment and Benefits

    1. Provides benefits counseling for employees.

    2. Processes applications and supporting documentation for separation

    incentive pay.

    3. Coordinates the processes associated with reemploying former VSI


    4. Informs employees returning from military leave of any Voluntary

    Separation Incentive Payment offers they may have missed while on

    military leave.


    BPA Personnel Letter 576-1

    Human Capital Management

    October 2006


A. Inclusions

    A BPA employee is eligible for a VSIP if he/she:

    1. Commits to voluntarily resign or retire (by early or optional retirement)

    by a designated date and within a separation window. To retire with a

    VSI, the employee must be retirement eligible on or before his/her

    separation date.

    2. Is serving under an appointment without time limitation, i.e. a

    permanent appointment.

    3. Has been currently employed for a continuous period of at least three

    years with the Federal government; and

    4. Occupies a position that has been identified as eligible for separation


B. Exclusions

    An employee is ineligible for a VSI, under this program, if he/she:

    1. Is covered by statutory reemployment rights and who is on transfer

    employment with another organization.

    2. Has previously received any voluntary separation incentive payment

    from the Federal Government under any authority.

    3. Is a reemployed annuitant under a retirement system for employees of

    the Federal Government.

    4. Is eligible for disability retirement or would be awarded a disability

    retirement if he/she applied under a retirement system for employees of

    the Federal Government.

    5. Received a retention allowance for performing service during the 12

    month period preceding the date of separation.

    6. Received a recruitment or relocation bonus for performing service

    during the 24 month period preceding the date of separation.

    7. Received a student loan repayment benefit for performing service

    during the 36 month period preceding the date of separation.

    8. Is in receipt of a decision notice of involuntary separation for

    misconduct or unacceptable performance.


    Employees who receive a VSIP cannot return to employment in the Federal government under any type of appointment for a period of five years from the date of separation unless the employee repays the entire gross amount of the incentive payment prior to return to employment. This prohibition covers any kind of employment (e.g., permanent, temporary, expert, consultant, reemployed annuitant) as well as personal services contracts.



    BPA Personnel Letter 576-1

    Human Capital Management

    October 2006

    Except as noted below, an individual who has received a voluntary separation incentive payment and accepts federal employment within five years after the date of the separation on which the payment is based is required to repay the entire gross amount of the incentive payment to the agency that paid it. This repayment must be made prior to the first day of reemployment.

    Individuals returning to work as BPA employees and who received a voluntary separation incentive payment from BPA under the authority granted to the Administrator and Chief Executive Officer by P.L. 104-206, may apply to the COO for a repayment plan. If approved, the repayment plan for such employees will be implemented by payroll deduction on a bi-weekly basis, usually over three years and with interest calculated from the effective date of reemployment. The interest will be charged at BPA’s weighted average earning rate in effect on October 1 of the fiscal year that the employee returns to employment. A promissory note must be completed prior to return to employment.


    The Voluntary Separation Incentive Payment shall be equal to the lesser of an amount equal to the severance pay amount the employee would be entitled to receive under 5 USC 5595 (c) if the employee were entitled to payment under such authority (without adjustment for any previous payment made); or an amount determined by BPA, not to exceed $25,000.00.


    Consistent with business needs to encourage voluntary separations, the Chief Operating Officer will establish “open window periods during which separation

    incentive pay will be offered. A window may be open at any time and be of any duration.

    The Chief Operating Officer, or designee, may approve a request for a delayed separation consistent with completion of critical work in support of business objectives. The delayed separation date may not extend beyond the ending date for the VSI approved by OPM.


    If the applications for the VSI exceed available targeted slots for any category of positions designated as VSI-eligible by BPA in a specific offering, BPA will identify eligible recipients within such category in the order of their length of service time with BPA.


    A. 5, USC, Chapter 35, Subchapter II, Voluntary Separation Incentive Payments B. 5, USC 5595 ? Severance Pay

    C. P.L. 107-296, Chief Human Capital Officers Act of 2002


    BPA Personnel Letter 576-1

    Human Capital Management

    October 2006

    D. 5, CFR, Part 576, Voluntary Separation Incentive Payments

Kimberly Leathley

    Acting Chief Human Capital Officer


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