What is a Voluntary Early Retirement Authority?

A Voluntary Early Retirement Authority (VERA), also referred to as an early-out, is an opportunity to retire in advance of meeting the age and/or service requirement normally needed for retirement. As reflected in its official title, a decision to apply for a VERA is voluntary.

VERA allows organizations to reskill, modernize, restructure, and realign their workforce. VERA can be used alone or together with Voluntary Separation Incentive Payment (VSIP) to incentivize employees to leave voluntarily, to avoid or lessen the impact of involuntary reductions that are necessary due to known budgetary shortfalls, and/or to address positions that are no longer needed due to mission changes or different skill requirements. To receive approval to use these authorities, the Department of Commerce must make requests for specific offices and bureaus to the Office of Personnel Management (OPM). 

VERA allows bureaus/OUs that are undergoing substantial restructuring, reshaping, downsizing, transfer of function, or reorganization to temporarily lower their age and service requirements to increase the number of employees who are eligible for retirement. The authority encourages more voluntary separations and helps the bureau/OU complete the needed organizational change with minimal disruption to the workforce. By offering these short-term opportunities, the Department can make it possible for employees to receive an immediate annuity years before they would otherwise be eligible.

The Department must request VERA and receive approval from OPM before it may offer early retirement to its employees. The approval from OPM will stipulate a period during which the option will be available. When a bureau/OU has received VERA approval from OPM, any employee who meets the general eligibility requirements may be eligible to retire early. 

Who is eligible for a VERA?

All employees who receive an employee notice (announcing that a VERA period will be offered) and who meet the requirements below are eligible to apply.

To be eligible to retire under VERA, an employee must:

• Meet the VERA minimum age and service requirements (i.e., the employee has completed at least 20 years of creditable service and is at least age 50, or has completed at least 25 years of creditable service regardless of age);
  • The minimum age and service requirements are set by statute in 5 U.S.C. 8336(d)(2) for CSRS employees, and in 5 U.S.C. 8414(b)(1) for FERS employees. OPM has no authority to waive either the minimum age or service requirement for VERA eligibility.
• Have been continuously employed by the agency for at least 31 days before the date that the agency initially requested OPM approval of VERA;
• Hold a position that is not a time-limited appointment;
• Have not received a final removal decision based upon misconduct, or unacceptable performance;
• Hold a position covered by the agency’s VERA; and

Retire under the VERA option during the agency’s VERA window.

What is the Effect of Early Retirement on Annuity?

CSRS Annuity

• Commencing date of annuity - If the employee retires on the 1st, 2nd, or 3rd day of a month, annuity begins the following day. Otherwise, annuity begins the first day of the month following retirement.
• Calculation of annuity - Annuity is calculated based on the average high-3 salary and years and months of creditable service. Unused sick leave can be used for additional service credit. If the employee is under age 55, this calculation is reduced by one-sixth of one percent for each full month he/she is under age 55 (i.e. 2% per year).

FERS Annuity

• Commencing date of annuity - Annuity begins the first day of the month following retirement.
• Calculation of annuity - FERS Basic Annuity is calculated based on the average high-3 salary and years and months of creditable service. FERS employees were not entitled to use unused sick leave for additional service credit until October 28, 2009. For retirements effective after December 31, 2013, 100 percent of unused sick leave can be credited. Employees under FERS with a CSRS component should contact their human resources offices for additional information about using unused sick leave for service credit. 

There is no annuity reduction in FERS for employees who retire on an early voluntary retirement under age 55. A FERS transferee with a CSRS component in their annuity, who retires before age 55, will have the CSRS portion of the payable annuity reduced by one-sixth of one percent for each full month they are under age 55. No reduction will be applied to the FERS component of the annuity.

A FERS annuity supplement is payable to an employee who has completed at least one calendar year of FERS service when they reach Minimum Retirement Age (MRA). MRA is age 55 to 57, depending on date of birth. The annuity supplement is payable until eligibility for Social Security begins at age 62, subject to an earnings limitation.

What happens to employees’ unused sick leave?

For retirements effective after December 31, 2013, 100 percent of unused sick leave can be credited to an employee’s annuity. 

What is the Effect of Early Retirement on Benefits?

Health Benefits: Employees retiring in conjunction with a VERA or VSIP authority must have been covered under the FEHB Program (1) for the last 5 years of their Federal civilian service in order to continue such coverage in retirement, or (2) if less than 5 years, for all service since the employee was eligible for these benefits unless these requirements are waived.

OPM will grant pre-approved waivers to employees who have been:

1. Covered under the FEHB Program continuously since the beginning date of the agency's latest statutory VSIP authority, or OPM-approved VSIP or VERA authority; and
2. Retire during the statutory VSIP or OPM-approved VSIP/VERA period; and
3. Receive a VSIP; or
4. Take early optional retirement (i.e., VERA); or
5. Take discontinued service retirement based on an involuntary separation due to RIF, directed reassignment, reclassification to a lower grade, or abolishment of position.

Coverage as an annuitant is identical to coverage as an employee, but premiums are not paid on a pre-tax basis.

Life Insurance: Federal Employees Group Life Insurance can be continued through the retirement system provided the employee has carried the coverage for at least five years prior to retirement. Value and cost depend on elections made at retirement.

What is the Impact on Employment After Voluntary Early Retirement?

Non-Federal employment: Employees who take voluntary early retirement are not subject to any restrictions regarding their annuity, should they subsequently accept non-Federal employment. EXCEPTION: Employees covered under FERS who qualify for the annuity supplement could have the supplement reduced or discontinued due to an earnings limitation.

Federal employment: If an annuitant (i.e., a retired Federal employee) is hired under a Federal appointment, the annuitant is then considered a "reemployed annuitant." This means the annuity will continue, and the new Federal salary will be offset by the annuity amount, unless the employing agency seeks and is granted a waiver of the salary offset by OPM. If the reemployed annuitant works full time for at least one year, the annuitant may apply for a supplemental annuity. If the reemployed annuitant works full time for at least five years, the annuitant may then choose either a supplemental annuity or a re-computed annuity.

How are VERAs and VSIPs related?

VERAs and VSIPs are two different types of incentives that can be used to offset the impact of involuntary separations. A VERA allows an employee to opt to retire before meeting the normal age and years of service requirements. A VSIP is a lump-sum payment made to eligible employees who voluntarily separate through resignation, optional retirement, or early retirement. Depending on individual circumstances, some employees may be eligible for, and receive, either, or both incentives.

Where is the VERA Template?

https://www.opm.gov/policy-data-oversight/workforce-restructuring/voluntary-early-retirement-authority/vera-request-template.pdf.

Templates are for Bureaus asking for approval.  The below only applies to OS, BIS, EDA, ITA, MBDA, and NTIA:

https://www.commerce.gov/hr/2025-department-wide-vera/vsip-faqs

Updated March 2025.