Qualifying and Calculating Severance Pay - “THE PLAN” from DOGE
You might be eligible for severance pay if you are involuntarily separated from federal service. You have to be careful not to violate the rules of eligibility. Beyond eligibility, you need to know how a temporary appointment can change your severance pay.
In this episode we…
• Review the rules to be eligible for severance pay.
• Walk you through the Severance Pay Estimation Worksheet we created.
• Discuss limitations of the program and how you might lose payments.
• Offer critical action items you should consider starting today.
CLARIFICATION IN VIDEO:
It is stated that Basic Pay for the calculation does not include Locality Pay. Many LES have Basic Pay and Locality Pay separate with Adjusted Basic Pay as a third box adding both together. We suggest getting clarification from your HR to make sure the actual calculation is correct.
Welcome to Financial Planning 4 Feds. We are dedicated to educating federal employees on how to maximize value from their government benefits by developing and executing a financial plan.
0:43 Introduction
1:04 Severance Pay Eligibility
1:57 Severance Pay Calculation
4:53 Limitations and Payments
6:56 Walk through the Severance Pay Estimation Worksheet
10:31 Can My Severance Pay Stop?
13:25 Immediate Action Items
To be eligible for severance pay, you must:
1. Not have refused an offer of a position that is
a. i n the same commuting area,
b. in the same agency, and
c. no more than two grades below your current grade level.
2. In addition, you must have been employed for at least 12 continuous months, and cannot be eligible for an immediate annuity from a federal civilian retirement system or from the uniformed services.
3. Also, you must not be receiving workers' compensation benefits for wage loss due to an on-the-job injury.
Severance Pay Calculation
• Only civilian service is creditable for severance pay.
• Entitled to 1 week's basic pay for each year of civilian service up through 10 years,
• Plus 2 weeks' basic pay for each year of creditable service beyond 10 years.
• In addition, an age adjustment allowance of 2.5 percent is added for each full quarter of a year you are over 40 years of age.
Referenced Links
Severance Pay Estimation Worksheet created by Valor Wealth Partners: https://valorwealthpartners.box.com/s...
OPM Website – Reductions in Force: https://www.opm.gov/policy-data-overs...
Preparing for and Surviving a Government Shutdown video: • Preparing for and Surviving a Government S...
eOPF Download Instructions from Dept of Commerce: https://www.commerce.gov/sites/defaul...
Federal employees and their spouses are invited to complimentary educational workshops covering their federal benefits. For details, visit: https://fedimpact.com/VWP
Federal Benefit Resources:
https://www.opm.gov/
https://www.tsp.gov/
Would you like to know more?
https://www.valorwealthpartners.com/
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