Reserve Officers Association

Separation Payment Recoupment under RIF/VSI/SSB/VSP
Resolution No. 10-27

WHEREAS, the services use voluntary separation payments as a force management tool to reduce end strength through Reduction in Force (RIF), Voluntary Separation Incentive (VSI), Special Separation Benefit (SSB), and Voluntary Separation Program (VSP);

WHEREAS, individuals who separate voluntarily and then subsequently elect to join the Reserve Components are required to pay back to separation pay when they receive a qualifying retirement annuity according to Title 10, Sections 1174, 1175 and 1175b; and

WHEREAS, the repayment acted as a negative incentive causing the Reserve Components to see very few of the over 77,000 individuals from Fiscal Year 1990 to Fiscal Year 1996 who separated under VSI SSB join the Guard or Reserve and the; and

WHEREAS, While recruiting goals are currently being met during a down turned economy, the services do not always meet recruitment and retention goals and sometimes have had to lower recruiting standards; and

WHEREAS, the Secretary of Defense hasn’t used his authority to waive repayment; and

WHEREAS, Repayment of these incentives causes a financial hardship on retired veterans; and

WHEREAS, the tax laws governing these repayments require an individual to repay the full amount of the incentive before taxes, while deducting the amount of taxes paid when filing their taxes after retirement for every year the repayment is in effect;

NOW, THEREFORE, BE IT RESOLVED, that the Reserve Officers Association, chartered by Congress, urge Congress to strike or modify any legislative clause that requires repayment if an individual qualifies and receives a Uniformed Service retirement annuity; and

BE IT FURTHER RESOLVED, that until such language can be modified, the Defense Finance and Accounting Service be instructed to not deduct more than 25 percent of an individual’s retirement pay each paycheck; and

BE IT FURTHER RESOLVED, that the Veterans Administration cease withdrawal of repayments for these incentives from an individual’s disability pay; and

BE IT FURTHER RESOLVED, these changes should not be funded through offsets and reductions to the current compensation system or from reductions in Reserve force structure or readiness.

Adopted by ROA National Convention 10 February 2010
Source: Updated by ROA Headquarters (DS) and amended by the convention delegates.
Adopted as 07-05a by the ROA National Convention 30 June 2007
Replaces 07-05 which was adopted by the National Council 7 February 2007
Original Source: ROA Department of the District of Columiba 16 May 2007

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