Fedweek

Buyout payments–also called voluntary separation incentive payments (VSIPs), especially in DoD–are used to lure employees to separate, either for retirement or otherwise, and require repayment of the full pre-tax amount if the individual returns to government work within five years. Agencies use them for downsizing or reorganization–although those other than DoD must obtain permission from OPM–commonly pairing them with early retirement offers. They were widely used in the 1990s as DoD and other agencies cut staff but have been much less common in recent years as the government overall has grown since 9/11. However, DoD said that the “anticipated reductions to the DoD budget over the next few years require management to efficiently reduce the workforce while not adversely affecting the mission and the department’s commitment to support our warfighters. Buyouts provide a less expensive, more humane, and more manageable way to efficiently reduce and restructure the workforce . . . The department anticipates significant use of VSIP in the foreseeable future as civilian workforce levels drop in response to announced and forecasted reductions in funding, and as the need for reshaping the workforce continues.” DoD also recently imposed a partial hiring freeze at many headquarters functions to meet goals set by both the Pentagon and Congress to reduce those staffs.