Since 2025, federal employees across Washington have received a series of exit offers: early retirement windows, buyout payments, and deferred resignation agreements, often with only days or weeks to decide. Some of these offers are a good deal. Others cost more than they pay, through a lost retirement supplement, a gap in health coverage, or a release of claims the employee did not realize they had. As a Washington DC federal employee attorney, we review these offers regularly, and the details buried in them matter more than the headline number. Here is what to check before you sign.
What is the difference between VERA, VSIP, and deferred resignation?
VERA is Voluntary Early Retirement Authority, which lets eligible employees retire with an immediate annuity before normal retirement age. VSIP is the Voluntary Separation Incentive Payment, a lump-sum buyout for leaving federal service. Deferred resignation is an agreement to resign at a set future date, usually while staying on the payroll in the meantime.
Agencies often offer VERA and VSIP together, and many employees qualify for both. Each requires agency authority, generally approved by OPM and tied to a specific workforce restructuring, so eligibility is limited to the positions, grades, and locations the agency designates.
Am I eligible for early retirement, and what will I get?
Under VERA, you can generally retire at age 50 with at least 20 years of creditable service, or at any age with at least 25 years. Under FERS, the annuity is not reduced for retiring early.
There are two traps. First, the FERS annuity supplement, which helps bridge the gap until Social Security begins, is not paid until you reach your minimum retirement age, which is between 55 and 57 depending on your birth year. Someone who retires at 52 may wait several years for it. Second, you must generally have been enrolled in the Federal Employees Health Benefits program for the five years immediately before retiring to keep coverage in retirement. Losing FEHB is often the most costly mistake in an early retirement.
How much is a VSIP buyout, and can I lose it?
For most agencies, VSIP is the lesser of your calculated severance pay or $25,000, under 5 U.S.C. § 3523. It is paid as a lump sum and taxed as ordinary income, so a mid-career GS-14 in Washington may take home noticeably less than the gross figure.
The repayment rule surprises many people. If you return to federal employment within five years of separation, including through a personal services contract with the government, you generally must repay the entire VSIP before your first day. Anyone considering a later return to federal service should factor that in, and anyone thinking about contract work should confirm how the contract is structured.
What should I look for in a deferred resignation agreement?
Read the agreement itself, not the summary email. The terms decide what you receive, what you can do during the deferral period, and what you give up.
The 2025 deferred resignation offers generally kept employees on pay and benefits until a set resignation date while relieving many of them of regular duties. The written agreements varied by agency. Check whether you can take outside employment during the deferral period and under what ethics rules, whether the agency can end the arrangement early, and whether the agreement contains a waiver of appeal rights or a release of claims. Some employees who signed were later told their positions were ineligible, so get written confirmation that your position qualifies.
Am I giving up any legal claims by accepting?
Possibly. Many exit agreements include a release of discrimination, whistleblower, and MSPB claims, and accepting a voluntary retirement or resignation generally ends your right to appeal the separation.
When a waiver covers age discrimination claims, the Older Workers Benefit Protection Act sets minimum requirements, including time to consider the offer and, in many cases, a seven-day window to revoke after signing. A separation is also not always truly voluntary. The MSPB can hear an appeal of a retirement or resignation that was coerced, or that relied on materially misleading information the agency provided. That is a hard standard to meet, so if you have a pending EEO complaint or whistleblower disclosure, have it evaluated before you sign.
What else should I check before I sign?
A few practical questions can change the math entirely:
- Has your HR office confirmed your service computation date in writing?
- Will you keep FEHB and FEGLI into retirement?
- If you separate in the year you turn 55 or later, you can generally withdraw from the Thrift Savings Plan without the 10 percent early withdrawal penalty. Does your timing qualify?
- Will a voluntary separation affect your eligibility for unemployment compensation?
- Is your annual leave payout counted correctly?
Ask HR for a written retirement estimate before the deadline, not after.
Why talk to a Washington DC federal employee attorney before accepting?
The offer is written by the agency, and HR’s job is to process it, not to protect you. An attorney can read the release language, tell you which pending claims you would give up and what they may be worth, and confirm whether your separation would count as voluntary. Where there is room, counsel can also negotiate. A pending EEO complaint, for example, can sometimes be settled alongside the exit, with terms such as a clean record or a neutral reference that the standard offer leaves out.
Deciding with the full picture
VERA can provide an unreduced FERS annuity years early, VSIP can add up to $25,000, and a deferred resignation can buy time on the payroll. Each comes with conditions, including a delayed annuity supplement, the five-year FEHB rule, a five-year repayment rule, and releases that may end claims you have not yet filed. The Mundaca Law Firm advises federal employees on exit offers from our office at 1300 I Street NW. If you have received an offer with a deadline, speak with a Washington DC federal employee attorney and schedule a confidential consultation before the window closes.