Summary - Proper Treatment of Retirement Incentive Payments

The U.S. Department of Education has recently provided guidance on the proper treatment of “abnormal or mass severance pay” paid to separating employees as a result of a plan to encourage employees to leave their employment. This includes all costs associated with an incentive to employees to leave government service and includes “buy-outs.” The U.S. Department of Education has concluded that these types of expenses cannot be charged to Federal programs unless prior approval has been obtained from the U.S. Department of Education. The request for approval must, at a minimum, “demonstrate the reasonableness and allocability of such costs to Federal programs.” Additional questions regarding this matter should be addressed to Mary Gougisha, Director, Indirect Cost Group, U.S. Department of Education at 202-377-3835.

For questions about this information, contact dpifin@dpi.wi.gov (608) 267-9114

Last updated on 4/7/2009 11:57:04 AM