Voluntary Separation Incentive Program

The enrollment period for the Voluntary Separation Incentive Program has concluded. Faculty and staff with questions may continue to email [email protected].

For VSIP participants: Please note that the VSIP team will notify you on June 10 of your separation date along with "next steps" regarding benefits information including COBRA for those not retiring with benefits under HR54. This email will include the General Release of Claims for your signature with instructions on submitting. Please continue to reference the FAQs below.

Plan Documents


Frequently Asked Questions

What are the general disclosures for the VSIP?

When age discrimination claims are included in a release, the Older Workers Benefit Protection Act requires that employers provide employees with information on the eligibility for the program. For a voluntary program like the VSIP, those disclosures include the job title, age, and eligibility for each employee covered by the program. Please see the links above on this page for the disclosures.

Why is the University offering the VSIP to Commonwealth Campus employees?

Enrollment has declined significantly at the Commonwealth Campuses, in aggregate, over the past 10 or so years while the number of faculty and staff at the campuses has remained relatively flat. The University must reduce its overall operating costs and prioritize funding for investment in student-focused initiatives, and there is no way to do this without addressing personnel costs. Penn State must address its existing operational and personnel approaches so that it can focus on its commitment to delivering the highest value to students and creating a more resilient institution. This is a proactive measure to address the University’s budget challenges and create a sustainable business model while providing a substantial financial package to Commonwealth Campus employees who may wish to pursue retirement or other professional opportunities outside of Penn State.

Why is the VSIP limited to employees at the Commonwealth Campuses? 

This program is designed to help address specific challenges at the Commonwealth Campuses. At this time there are no plans to implement a VSIP at University Park, the law schools or the College of Medicine, however, that decision may be reevaluated based on future needs.

Is this a prelude to upcoming layoffs or non-reappointments? 

Voluntary workforce reductions like this VSIP allow employees to weigh their options, take time for making critical decisions, and be in more control of their futures. The possible impacts of this program and any subsequent actions to be taken will depend on many factors, including how many employees participate, impacts on a department or program, and potential additional changes to Penn State’s financial health, among others.

Involuntary layoffs and non-reappointments could occur in the future and could include people who are eligible for this Program. The benefits under the VSIP will not be offered as part of an involuntary layoff or non-reappointment.

Has the University offered VSIPs in the past? 

The University offered a voluntary retirement package to retirement-eligible employees University-wide in 2016 and offered a similar plan in 2014 to eight western Pennsylvania campuses, as well as within the College of Agricultural Sciences, Outreach and Penn State Dickinson Law. Other higher educational institutions have offered similar programs.

Why are specific groups of employees excluded from VSIP?

Exclusions are based on the needs of the University to continue delivering on its mission of teaching, research and education as well as funding sources for employee salaries and employment contracts.

How will any unused vacation and sick time balances be paid to employees who participate in the VSIP?

Vacation and sick leave will be paid out in accordance with existing University policy.

If the University defers my departure date, do I still get the full 12 months of severance pay?


If someone has already stated their retirement, are they eligible?

Yes, as long as they meet the eligibility and enrollment requirements, employees who have already announced a retirement date in accordance with HR 54 are eligible to enroll in the VSIP and receive the benefits, but the separation date will be governed by the VSIP. Units will need to inform Human Resources of any individuals in their unit in this situation if the individuals choose to pursue the VSIP.

Are employees who are on phased retirement eligible to participate in the VSIP?

As long as they meet the eligibility and enrollment requirements, employees on a phased retirement are eligible to enroll in the VSIP and receive the benefits, but the separation date will be governed by the VSIP.

Are employees who work at University Park and support the Commonwealth Campuses eligible for the VSIP?

Eligibility to participate in the VSIP is based on several factors such as the primary work location of the employee and where positions are funded. Employees should check the relevant plan documents on the HR website

Are faculty who are in their terminal year after being denied tenure eligible to participate in the VSIP?


Are faculty or staff who have announced a resignation but are still working as of May 8 eligible to participate in the VSIP?


Are faculty or staff who are currently on an approved leave of absence eligible to participate in the VSIP?

Yes, any employee who is on an approved leave of absence is eligible to participate as long as they meet the eligibility and enrollment requirements.

Are joint hires between a Commonwealth Campus and University Park and/or the College of Medicine eligible to participate in the VSIP?

Eligibility to participate in the VSIP is based on several factors such as the primary work location of the employee and where positions are funded. Employees should check the relevant plan documents on the HR website

If I choose to participate in the VSIP, and then I find another job outside of Penn State, and leave earlier than my agreed upon separation date am I still eligible to receive the severance payment?

No, you must remain actively employed by Penn State through your designated separation date in order to receive benefits payable under the VSIP.

How will the severance payment be issued to me?

Your payment will be direct deposited into the same account to which your current payroll is deposited. The lump-sum severance payment cannot be directed to any tax-deferred account and must be distributed to you directly.

How is the severance payment taxed?

The University cannot provide tax advice to employees. Individuals considering the VSIP should consult a financial adviser or attorney for questions regarding their individual situation. 

In general, severance pay is considered supplemental wages (not regular wages) because it is not a payment for services in the current payroll period, but a payment made upon or after termination of employment for an employment relationship that has terminated. The University will withhold 22% federal income tax on the severance payment. Social Security, Medicare, state and local taxes also will be deducted,
where applicable in accordance with taxing authority regulations.

When will I receive the lump-sum severance payment?

A severance payment equal to twelve (12) months of your base salary, less applicable withholdings and deductions, in effect on your Separation Date, will be paid in lieu of benefits under the University's severance policy. This severance will be paid in a single lump-sum payment within thirty (30) days of the effective date of the General Release of Claims.

Will any benefit deductions, including retirement contributions, be made from my lump sum payment?

No, severance payments do not count as earnings for Penn State benefits purposes and there will be no retirement contributions made in connection with this payment.

If I am faculty, do I forfeit tenure?

Consistent with any voluntary separation, tenured faculty who participate in the VSIP will relinquish their indefinite tenure statuses on their separation date.

If I am faculty, am I eligible for emeritus status?

Faculty eligible for emeritus status will be afforded such status upon retirement according to Policy AC 25.

Can someone who applies to the VSIP be denied because their departure would leave a gap or weaken Penn State’s work in a particular area or program?

No, anyone who meets the eligibility criteria may choose to enroll in the VSIP. However, the University reserves the right to delay an employee’s separation date to no later than December 31, 2024, based on the University’s academic, operational and budgetary needs.

Who can I talk to about my retirement finances?

If you participate in the State Employee's Retirement System (SERS), you can contact SERS at 1-800-633-5461. If you participate in TIAA, you can contact TIAA at 1-866-842-2173. Your plan administrator can provide assistance to prepare you for retirement by taking into account a variety of factors including your age, number of years of service, and savings.

Is this a “retirement program”?

No. The VSIP offers active eligible full-time employees at the Commonwealth Campuses a chance to voluntarily terminate their employment with the University in exchange for a lump sum payment and the temporary extension of some benefits. However, employees who are within 36 months of retirement eligibility as outlined in HR 54, and meet additional criteria outlined in the plan will be able to enroll in the medical plan offered to retirees, as well as receive other fringe benefits offered to retirees. This provision does not apply to employees hired after January 1, 2010, and enrolled in the Retirement Health Care Savings Plan.

Will employees who agree to the VSIP be able to work for the University in the future?

Employees who choose to participate in the VSIP will be prohibited from being employed by the University in any capacity or serving as a consultant to the University, directly or indirectly, for a period of 36 calendar months from their separation date.

If you have any further questions, feel free to reach out to [email protected].