Severance pay


Material Information

Severance pay what it is
Series Title:
Personnel management series ;
Physical Description:
1 folded sheet (6 p.) : ; 23 cm.
United States Civil Service Commission
U.S. Civil Service Commission, Bureau of Policies and Standards :
U.S. G.P.O.
Place of Publication:
Washington, D.C
Publication Date:
Rev. Mar. 1973.


Subjects / Keywords:
Severance pay -- United States   ( lcsh )
federal government publication   ( marcgt )
non-fiction   ( marcgt )

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 004521571
oclc - 51677554
sobekcm - AA00005275_00001
System ID:

Full Text

Bureau of Policies and Standards
Personnel Management Series No. 23
Revised March 1973

Sl.5 ..


Digitized by the Internet Archive
in 2010 with funding from
University of Florida, George A. Smathers Libraries with support from Lyrasis and the Sloan Foundation


There are some limitations on eligibility for sever-
ance pay. For example, if, when separated, an em-
ployee is receiving payments from the Labor Depart-
ment's Bureau of Employees' Compensation for a
job-related injury he is not entitled to severance pay.
Neither is an employee who is entitled to an immediate
annuity which includes a reduced annuity, a disability
annuity or annuity earned as a member of the
uniformed services.
The following material answers the most frequently
asked questions about severance pay.

1. Q. How do I know if I am eligible for severance pay?
A. To be eligible for severance pay, you must be
serving under one of the following types of appoint-
ments at the time of your separation:
(1) A career or career-conditional appointment in
the competitive service, or their equivalent in the
excepted service;
(2) An indefinite-appointment system that preceded
the career-conditional appointment system;
(3) sAn indefinite appointment without time limita-
tion in the excepted service, except a Presidential
appointment, an appointment filled by a non-
career executive assignment, or an appointment
to a Schedule C position;
(4) An overseas limited appointment without time
(5) An appointment held as a status quo employee
including an appointment by which you became
an indefinite employee upon promotion, demo-
tion, or reassignment;
(6) A time-limited appointment in the Foreign Serv-
ice to which you were assigned under a statutory
authority that entitled you to reemployment in
your former agency, but your right to reem-
ployment had expired.
In addition, you must have been currently employed
for a continuous period of at least 12 months. If you
were either a part-time or a full-time employee and
you meet these requirements you are eligible for
severance pay.
2. Q. If entitlement to an Immediate annuity at the time
of separation Is a bar to severance pay, will my sever.
ance pay be discontinued if I become entitled to an
annuity beginning at some later time?
A. No. The only provision for discontinuing or sus-
pending severance pay applies to situations involving

4. Q. Who determines whether I am entitled to severance
A. The separating agency makes this determination.
If you are eligible, your agency advises you of the
maximum amount of severance pay you may receive
(referred to as the severance pay fund), the date
payment will begin, and the number of weeks required
to exhaust the severance pay fund.
5. Q. What should I do if my agency determines that I
am not entitled to severance pay, and I believe that
I am?
A. You should file a claim for pay with the Claims
Division, General Accounting Office, Washington,
D.C. 20548.
6. Q. How is the amount of my severance pay determined?
A. Your severance pay fund (that is, the maximum
amount of severance pay you may receive) is deter-
mined on the basis of your basic rate of pay at the
time of separation and years of creditable service
(basic allowance). If you are over 40 years of age,
an age adjustment allowance is also a part of the
Your basic allowance is computed on the basis of
one week's basic salary for each year of creditable serv-
ice for the first 10 years, and two weeks' basic salary
for each year of service thereafter. Your age adjust-
ment allowance is computed on the basis of 10 per-
cent of the basic allowance for each year your age
exceeds 40 years of age.
For example, if you are 45 years old with 20 years
of creditable service, and your basic weekly salary
is $100, your severance pay fund would be computed
as follows:

Basic allowance:
$100 (weekly salary) x 10 (first 10 years)
$100 (weekly salary) x 2 x 10 (years in excess
of 10)

Age adjustment allowance:
$3,000 (basic allowance) x 5 (years
over 40) x 10%

= $1,000
= $2,000

= $1,500

Severance pay fund:
$3,000 (basic allowance) + $1,500 (age
adjustment allowance) Total = $4,500
7. Q. What method of payment is used?
A. As a separated employee you receive from the
Treasury Department a check for approximately the

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Military service which precedes civilian service is not
creditable for severance pay purposes.
9. Q. If I resign will I be entitled to severance pey?
A. Generally speaking, a resignation is a voluntary
separation and would not entitle you to severance
pay. However, there are three circumstances under
which your resignation is considered involuntary for
purposes of severance pay, provided you have not
declined the offer of an equivalent position in your
agency before separation and that you resign after
receipt of:
(1) A specific notice in writing by your agency that
you are to be involuntarily separated and the
separation is not because of misconduct, delin-
quency, or inefficiency;
(2) A general notice of reduction-in-force by your
agency which announces that all positions in
your competitive area will be abolished or trans-
ferred to another commuting area and that your
resignation is effective on a date which is no
more than one year before the abolition or trans-
fer; or
(3) A notice by your agency proposing to separate
you for declining to accompany your activity
when it is to be moved to another commuting
area because of a transfer of function and when
all positions in your competitive area are to be
abolished or transferred to another commuting
area within a period of no more than one year.
10. Q. What Is an "equivalent position"?
A. For purposes of entitlement to severance pay, an
equivalent position is one of like seniority (seniority
has meaning only for employees in the postal field
service), tenure, and pay (other than a retained rate
of pay) located within the employee's commuting
11. Q. My agency is transferring the function of which my
position is a part to an Installation located in a city
500 miles away. If I do not move with my position.
I will be separated. The agency has offered to pay my
moving expenses to the new location, but for personal
reasons I do not wish to move. When I am separated.
will I be entitled to severance pay?
A. Failure to accept such an assignment to a dif-
ferent commuting area in connection with a trans-
fer of function (or reduction-in-force) situation is
not a bar to severance pay. Therefore, if you are
otherwise qualified, and are separated for declining

reassignment in a transfer of function you are entitled
to severance pay.
12. Q. Is a refusal to accept an assignment to another com-
muting area ever a basis for denying severance pay?
A. Yes, but only when geographic reassignment is a
condition of employment, as evidenced by the em-
ployee's position description or other written agree-
ment or understanding providing for such assign-
ments. In all other cases an employee who is separated
because he declines to accept assignment to another
commuting area is eligible for severance pay.

13. Q. I have received my draft notice. Will I be entitled to
severance pay?
A. No. Separation to enter the military service does
not entitle an employee to severance pay.

14. Q. May I accept other employment and still receive
my severance pay?
A. Yes, unless (1) your new employment is in the
Federal Service or the District of Columbia govern-
ment or (2) your activity is transferred to a non-
Federal organization, and you accept employment
with the successor organization within 90 days of the
date of the transfer.
If you accept a temporary appointment with the
Federal Government or District of Columbia Govern-
ment your severance pay will be suspended during
your temporary employment and then resumed upon
termination of the appointment. If you accept an
appointment without time limitation with the Federal
Government or District of Columbia Government,
regardless of whether the tour of duty is full-time,
part-time, or intermittent, you lose your right to
severance pay, and further entitlement to severance
pay will depend upon the nature of a subsequent
15. Q. Is entitlement to unemployment compensation a
bar to severance pay?
A. No.
16. Q. Am I entitled to severance pay if I am receiving em-
ployees' compensation for a job-related injury?
A. No.

17. Q. Will my severance pay, and the period covered by
the severance pay, be creditable for retirement or leave
accrual purposes?
A. No, because when a person receives severance pay
he is no longer a Federal employee.
18. Q. If I die during the period before my severance pay
fund is exhausted, what happens to the balance?
A. Payments will continue to be made at the same
rate and interval to your survivors or beneficiaries
until your fund is exhausted. This money will not be
paid to your estate in a lump sum.

19. Q. Is there any limit on the amount of severance pay
I can receive?
A. Yes. The total severance pay you are eligible to
receive is limited to one year's pay at the rate of pay
you received before separation. This is a lifetime limi-
tation. Therefore, if you are in a position to receive
severance pay a second time, your severance pay can-
not continue after the sum of the two periods reaches
52 weeks.
Suppose, as in Question No. 6, the total severance
pay to which you are entitled is $4,500. Because your
pay at the time of separation is $100 it will take 45
weeks to pay you your entire severance pay. After
receiving severance pay for 20 weeks, you are re-
employed in the Federal Government under an ap-
pointment without time limitation, and the severance
pay is terminated. You work for three full years and
are again separated under circumstances entitling you
to severance pay. You are now 48 years of age and
have 23 years of creditable service. At the time of
your second separation your basic weekly pay is $125.
Your severance pay fund is computed as follows:
Basic allowance:
$125 (weekly salary) x 10 (first 10 years) = $1,250
$125 (weekly salary) x 2 x 13 (years in excess
of 10) = $3,250
Age adjustment allowance:
$4,500 (basic allowance) x 8 (years
over 40) x 10% = $3,600
Severance pay fund:
$4,500 (basic allowance) +$3,600 (age
adjustment allowance) Total = $8,100

The severance pay fund equals $8,100. It will take
64 and 8/10 weeks ($8,100 divided by $125) to pay
you your entire severance pay. However, since total
severance pay may not exceed 52 weeks, and since
you have already received 20 weeks of severance pay,
you are entitled to only 32 weeks of severance pay at
$125 a week.
20. Q. What is the authority for paying severance pay?
A. The severance pay statute is section 5595 of title 5,
United States Code; the severance pay regulations
issued by the United States Civil Service Commission
are in subpart G of part 550 of title 5, Code of Federal
21. Q. Where can I get additional information about sever-
ance pay?
A. The personnel office of your agency, or the United
States Civil Service Commission, will answer any
other questions you have about severance pay.

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