When federal agencies are undergoing substantial restructuring, downsizing or reorganization, there is a system in place to temporarily lower the age and service requirements for a FERS retirement in order to encourage more voluntary separations.
Voluntary Early Retirement Authority (VERA)
Voluntary Early Retirement Authority (VERA) helps an agency complete reorganization or a Reduction in Force (RIF) by making it possible for employees to retire with an immediate annuity years before they’re eligible under FERS. This is also known as an Early Out.
An agency must first request VERA, and receive approval from the Office of Personnel Management (OPM), before early retirement offers are made to employees. OPM stipulates a limited period of time when the Early Out option is available. (Only agencies like the Department of Defense are not required to seek OPM approval for their use of VERA.)
“Think of it this way — an Early Out under VERA enables you to retire with an immediate annuity and all of your other benefits at a younger age.”
An Early Out Is Only Available When Offered By Your Agency
Generally, you’re offered an Early Out retirement when your agency undergoes a major reorganization. The good news – there is no reduction in your FERS annuity with this type of voluntary early retirement. However, you must meet certain age and service requirements:
- At least 50 years old with 20 years in service
- Any age with at least 25 years of service
Since the Early Out offer is temporary, you need to separate from service before the end of the established time period. Also, you must have been working for the agency offering the Early Out at least 30 days before the VERA request was made to the OPM.
You’re Eligible For The FERS Supplement & FEHB With An Early Out
Think of it this way — an Early Out under VERA enables you to retire with an immediate annuity and all of your other benefits at a younger age. These retirement benefits include the FERS Supplement, FEHB and FEDVIP.
The FERS Supplement fills the income gap between your retirement and age 62, which is when you’re eligible for Social Security. However, with an Early Out under VERA, you’ll have to wait until you reach your Minimum Retirement Age (MRA) before you can get the FERS Supplement. When it comes to federal insurance programs, you’re eligible to keep them in an Early Out retirement as long as you meet the requirements like the FEHB 5-Year Rule.
Accepting an Early Out is a big decision. Touch base with an FRC® trained advisor to make sure you’ll have the retirement income you’ll need before you take the plunge.
