New Federal Employee Buyout Offers Aim to Reduce Workforce
The Trump administration is once again offering buyouts and early retirement incentives to reduce the size of the federal workforce. As part of broader cost-cutting measures, agencies are turning to long-standing buyout programs to encourage voluntary departures. Unlike the controversial “Fork in the Road” proposal, which faced legal scrutiny, the latest buyout efforts are grounded in established federal policies and carry fewer legal risks for employees.
In a recent Bloomberg Law article, Heather White, a partner at Federal Practice Group, emphasized the key difference between these new buyouts and previous proposals:
“You have assurance it will actually take place as advertised, as opposed to deferred resignation being a complete gamble,” White explained.
With traditional buyouts now in play, employees face an important decision: Is a federal employee buyout the right option for them?
How Do Federal Employee Buyouts Work?
To reduce the size of the workforce, the federal government offers two primary types of voluntary separation incentives:
Voluntary Early Retirement Authority (VERA) – Allows eligible employees over 50 with at least 20 years of service to retire early while retaining federal benefits.
Voluntary Separation Incentive Payments (VSIP) – Provides a one-time lump sum payment (typically up to $25,000) for employees who choose to leave federal service.
Several agencies, including the Social Security Administration (SSA) and the Department of Health and Human Services (HHS), are currently offering early retirement options and VSIP buyouts to encourage voluntary departures.
- The Securities and Exchange Commission (SEC) has even offered $50,000 in buyout incentives—far exceeding the government-wide cap—through its union contract.
- Department of Health and Human Services (HHS) is offering an additional eight weeks of paid leave on top of the $25,000 buyout, allowing employees to exit with full pay and benefits for two months
While these programs provide financial incentives for employees considering departure, they may not be the right choice for everyone. Before making a decision, employees should carefully weigh the long-term impact on their careers, benefits, and financial stability.
Legal and Financial Considerations for Federal Employees
While buyouts are established workforce reduction tools, they come with important legal and financial implications. Employees considering a federal employee buyout should carefully evaluate:
- Retirement benefits – How will an early exit impact pension and healthcare eligibility?
- Reemployment restrictions – Some buyouts prohibit returning to federal service for a set period.
- Legal protections – Unlike “Fork in the Road,” buyouts allow employees to challenge improper pressure to resign through the Merit Systems Protection Board (MSPB).
“Agencies can pay for buyouts with their regular allocation from Congress,” White noted, highlighting the stronger legal standing of these programs compared to previous separation offers.
Making the Right Choice: What to Consider Before Accepting a Buyout
If you’re considering a federal employee buyout, it’s essential to carefully evaluate your options before making a decision. Here are a few key steps to take:
- Review the terms carefully – Understand eligibility, payout structure, and any restrictions on future federal employment.
- Consult a financial advisor – Assess how a buyout will affect long-term retirement plans.
- Seek legal advice – Make sure you fully understand your rights and options before making a decision.
As agencies begin implementing these buyout programs, Heather White and Federal Practice Group continue to provide trusted guidance to federal employees navigating their options.
With extensive experience in federal employment law, White remains a key voice on workforce policies affecting government employees. If you are considering a buyout or have other employment concerns, the Federal Practice Group is here to help.
Ready to take the next step? Fill out our client intake form to schedule a consultation and get the legal guidance you need.
Read More
Read the full Bloomberg Law article featuring Heather White.
Heather White on VERA: Weighing Trump’s Federal Retirement Offers
Debra D’Agostino on the Uncertainty Surrounding Federal Workforce Reductions