What is Voluntary Separation Incentive Pay (VSIP)?
Voluntary Separation Incentive Pay (VSIP), which is commonly referred to as a buyout, is a payment of up to $25,000 to encourage eligible employees to separate from service voluntarily (either by retirement or resignation) to avoid or minimize the need for involuntary separations due to reduction in force (RIF), base closure, reorganization, transfer of function, or workforce restructuring. The buyout payment is equivalent to an employee’s severance pay entitlement up to a maximum of $25,000 before taxes. Buyouts are used at management’s discretion and are not an employee entitlement.
