Date: September 10, 2009

Bulletin Number: 925



Executive Voluntary Severance Program Payments


To provide agencies with instructions for processing terminations, additional dues deductions and voluntary severance program payments.

Affected Employees

Selected full-time CSEA, PEF or M/C employees in Executive Branch agencies.


Pursuant to Budget Bulletin D-1125, the Executive Voluntary Severance Program was created to achieve recurring savings to the State Financial Plan. The program is available to CSEA and PEF employees and employees in Management/Confidential positions.

The program offers a $20,000 incentive payment. Employees participating in the program may elect to receive the payment in one $20,000 or two equal $10,000 installments. If an employee elects to receive two installments, the second payment will be made in Pay Period 2 in FY 2010-11.

Effective Date(s)



Selected employees who elect to participate in the program must leave State service no later than close of business November 11, 2009.

Employees must be full-time annual employees on July 1, 2009 and at the time the employee elects to participate in the program.

Hourly and non-annual salaried employees are not eligible to participate in the program.

Employees who participate in the program may not return to Executive Branch agencies or Public Authorities as defined by Section 2.1 of Chapter 766 of the Laws of 2005 for a five (5) year period from the effective date of resignation.
Any employee who is rehired before the five (5) year period has expired is required to repay the severance payment in full.

OSC Actions

OSC has created two (2) new action/reason codes to be used on the Job Data page to report the employee’s separation from service.

Retirement/VSP – Voluntary Severance Program
Termination/VSP – Voluntary Severance Program

OSC has created the new Time Entry Earns Code VSP (Voluntary Severance Payment) to be used to make the payment(s).

The VSP payment(s) will be made in a separate check. There will be no direct deposit for this payment.

Agency Actions

Removal From Payroll

Agencies must use the new action/reason codes listed above on the Job Data page to report the separation of eligible employees.  The employee must be on the Division of the Budget (DOB) approved listing.

The employee must be terminated from all State agencies.  The agency should review all PayServ records on the EMPLOYEE HISTORY INFO SUMMARY and notify any other State agencies that the employee is separating under this program.  The other agency must separate the employee immediately.

Payment upon Removal From Payroll

Lump sum payments for vacation and overtime accruals and the Salary Deferral program may be paid together and should be submitted in the last regular paycheck upon separation for both retired and terminated employees.

PEF Dues

PEF dues (and agency shop) are .9 percent of an employee’s gross earnings, excluding overtime, holiday pay and lump sum payments received in lieu of general salary increases (see Payroll Bulletin No. 251).  Accordingly, employees who participate in the Voluntary Severance Program are subject to an additional $180 in dues or agency shop fees.  OSC has determined that the $180 in additional dues should be processed in the check that includes payment for accruals and/or Salary Deferral lump sum payment.  Agencies must notify PEF employees that these additional PEF dues will be withheld from this paycheck.  A new Deduction Code, 480 (PEF Severance Salary Deferral Lump Sum Payment), has been established for this purpose.

For PEF employees, agencies must access the General Deduction CD (Agency) page and enter the Deduction Code 480 (PEF Severance Salary Deferral Lump Sum Payment) with the applicable effective date, flat amount of $180 and a goal amount of $180.

Executive Voluntary Separation Program Payment

Agencies must enter the following information on the Time Entry page to pay the Voluntary Severance Payment.  The payment is effective after the employee separates from State service.

Earn Code:


Earnings Begin Date:

Enter the date of the day after the Termination or Retirement effective date.

Earnings End Date:

Enter the date of the day after the Termination or Retirement effective date.


$20,000 or $10,000

This payment may be made at any time after the employee’s separation, but no sooner than the paycheck following the payment of the employee’s last regular wages (i.e., the VSP payment must be paid after the last regular paycheck).

Deduction and Tax Withholding Information

Last Regular Paycheck

The employee’s last regular paycheck is subject to normal and applicable deductions including PEF dues.

VSP Payment

The employee’s VSP Payment check is subject to taxes, garnishments and Federal levies. Taxes will be calculated using the withholding information currently in the employee’s Tax Data pages.

Overpayment Recovery

Overpayment recovery will be applied to the last regular paycheck and the VSP payment.  For any employee who, at the time of payment, has an overpayment set up in Additional Pay that has a Goal Amount and Goal Balance that are not equal, the system will recover as much of the overpayment as possible.

Payroll Register and Employee’s Check

For the last regular paycheck, the new deduction code (480-PEF Severance Payment Dues) description and amount will be displayed on the payroll register, paycheck stub and/or direct deposit advice statement.

For the VSP Payment check, the earn code VSP description and amount will be displayed on the payroll register and the employee’s paycheck stub.


Questions about processing transactions may be directed to the Payroll Audit mailbox.

Questions about deductions may be directed to the Payroll Deduction mailbox.