Under the initial government-wide deferred resignation offer, some employees were put on paid leave as long as six months until they reached their resignation date—September 30, in most cases. Image: ImagePixel/Shutterstock.com
By: FEDweek StaffUpdated: The House Oversight and Government Reform committee has passed a bill (HR-7256) to allow agencies to offer buyouts—also called voluntary separation incentive payments—of up to six months of salary.
In most cases, that would be a substantial increase from the current maximum of $25,000 first set when the buyout program began during the Clinton administration. The bill further will “allow agencies to calibrate their offerings under that cap depending on need. It also ties the cap to inflation so the policy will remain viable in the future,” according to a summary of the bill.
Buyouts are designed to avoid the need for RIFs in downsizing and reorganizing situations, and require the recipient to agree not to work for the government for at least the next five years, among other restrictions. They commonly are paired with early retirement offers although there is no requirement that the two be offered together.
The bill represents the latest in a series of efforts over the years to boost the value of the incentive on grounds that value has been eroded over time and is not as strong an enticement for employees to leave their jobs voluntarily—particularly for those not eligible for retirement, even under early-out rules.
That argument had led to enactment during the Obama administration of a boost to $40,000, although only at DoD (now also called Department of War). While that initially was seen as a test for applying the higher figure government-wide, the boost was allowed to expire in 2021.
The first Trump administration several times backed reinstating the higher figure at DoD, but it didn’t press the issue and Congress did not act. More recently, in 2024, the Senate added language to a DoD funding bill to return to the higher level there but the language was dropped in a conference with the House.
While buyouts had been little used for a number of years before 2025, with offers in some cases below the $25,000 maximum (the limit relates to the value of severance pay an employee would receive if laid off). The usage did pick up last year, although even then buyouts were overshadowed by the deferred resignation program created early in the year.
Under the initial government-wide deferred resignation offer, some employees were put on paid leave as long as six months until they reached their resignation date—September 30, in most cases—while some agencies later made additional offers resulting in shorter paid leave periods. OPM last summer generally limited deferred resignation periods to 12 weeks, effective this year.
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See also,
Calculating Service Credit for Sick Leave At Retirement
FERS Supplement vs The 10% Pension Bonus
How Your FERS, Social Security and TSP Payments Get Taxed
Where Should I Put My TSP in Retirement
