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VERA 101

Updated: Aug 18, 2020

When a federal agency undergoes a significant reorganization or downsizing, its employees may be offered an opportunity to retire early with reduced requirements while still meeting full eligibility. As such, the Voluntary Early Retirement Authority, or VERA, allows agencies to reduce their workforce in such a way that may also benefit employees who would otherwise remain a handful of years away from a fully eligible federal retirement.


Allowances are made for a very specific period of time, in which either a FERS or CSRS employee can apply for retirement under the reduced requirements set forth by the VERA. Anyone age 50 or older with 20 years of service, or any age with 25 years of service, may retire with no pension reduction as well as no loss of FEHB or FEGLI benefits, as long as they have maintained coverage continuously for the five years leading into retirement.


The VERA is sometimes accompanied by a VSIP, or the Voluntary Separation Incentive Payment Authority, also known as the buyout authority. It is not uncommon for most VERA offers to include up to $25,000 as a one-time payment incentive¹ to even further encourage a reduction in the workforce.


When considering a voluntary early out, federal employees should weigh their options carefully. For example, even under a VERA, the FERS annuity supplement is not available until one reaches their Minimum Retirement Age⁴ (MRA), which may be years after separating. Also, TSP funds may not be accessible without penalty until age 59 ½, depending on one’s age at separation.


As you can see, many factors play into whether early separation under a VERA will be beneficial for your situation and lifestyle, and the right answer for you could be quite different from the coworker sitting next to you. At PARCO, our retirement strategists can help you lay out the implications of your options to help you determine the best path for your future. If you’re considering applying for a voluntary early retirement, or if you think one might be proposed within your agency soon, don’t hesitate to reach out for a second opinion. 


Works Cited:

¹United States. Congress, "Workforce Restructuring. Voluntary Early Retirement Authority", OPM. www.opm.gov/policy-data-oversight/workforce-restructuring/voluntary-early-retirement-authority/.

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