Voluntary Separation Program FAQ

• To be eligible for this program, you must be Staff, APT Faculty, Tenure-Track Faculty, or Tenured Faculty, and:
• Must meet age and service requirement, as defined by TRS or ORP to receive annual annuity payments.
• Must meet age and service requirement, as defined by The University of Texas System, Retired Employee Group Medical Insurance Program.
• Must be full time (1.0) or 0.5 or greater FTE.
• Must be eligible by January 12, 2026, or become eligible by May 31, 2026.

And must not meet any of the following criteria:

• Employees who are in a position that is 100% grant funded.
• Employees who have submitted resignation documentation prior to January 12, 2026.
• Employees who have submitted retirement documentation prior to January 12, 2026, including:
  • Those who have submitted a written retirement or phased retirement request, to their manager/department or TCE People Services department.
  • Those who have formally initiated the retirement filing process with TRS or ORP.
  • Those with a retirement eForm or Clearance Form in submitted, pending approval, or approved status.
• Athletic Coaches.
• Retiree rehires (i.e. cannot be a current retiree).
• Employees in a separation notice period or on corrective action.
• Temporary, adjunct and casual employees.

Employees who have formally announced their retirement to their departments prior to January 12, 2026 are not eligible to participate in the VSP. Employees who have not yet formally announced their retirement, can choose if they would like to participate, with the understanding that they must follow all the terms of the VSP.

Yes, as long as they meet all eligibility and enrollment requirements.

Only benefits identified in the program will be approved.

All eligible employees who apply for VSP will be able to participate.

Eligibility will be determined at the time of application, and an employee will either be approved, or conditionally approved for those who are expected to become eligible by May 31, 2026, the last day of employment.

Notices will be sent to employees and departments between March 5–31, 2026 in most cases. For those employees who are conditionally approved or for whom we are missing any of the required documentation, the final approval will be sent once all conditions of the VSP have been met. 

No. Participation is strictly voluntary.

You can revoke your application until March 4, 2026. After that, retirement on May 31, 2026 is required.

Potential participants are strongly urged to discuss participation with their family and personal tax advisor, or consult with an attorney as the University cannot provide tax advice or legal advice.

Yes, discussion is encouraged, but the decision must remain voluntary. Supervisors cannot require or prohibit participation.

A limited number of staff may participate in Phased Retirement only at the request of their VP. Employees may not request this themselves.

• Once the employee application is received, TCE will verify the employee’s retirement eligibility.
• The employee must provide TCE with a copy of the TRS or ORP Proof of Retirement Eligibility notice so that TCE can confirm their VSP eligibility.
• Applications submitted with errors will be returned to the employee for correction.
• All employees who meet the eligibility criteria and apply will be accepted.

Staff: Not eligible until June 1, 2028.

Faculty VSP: Not eligible until June 1, 2027

Future employment at UTA, following the one-year separation date, will be at the Dean and Provost’s discretion and will be limited to part-time faculty positions at the part-time faculty compensation rate, as adjuncts, to teach not more than 2 classes per semester.

Faculty Phased Retirement: Not eligible until June 1, 2028

Future employment at UTA, following the one-year separation date, will be at the Dean and Provost’s discretion and will be limited to part-time faculty positions at the part-time faculty compensation rate, as adjuncts, to teach not more than 2 classes per semester. 

Yes. Other UT System institutions or Texas state agencies are not covered by UTA VSP, but TRS/ORP guidelines may apply.

Your VSP lump-sum payment is treated the same as regular wages.

It will:

• Be reported in Box 1 of your W-2 for the year it is paid
• Be subject to federal income tax withholding
• Be subject to Social Security (OASDI) and Medicare (FICA) taxes

Important: This payment is not issued separately as non-wage income. It is considered taxable compensation.  

Yes. Because the VSP payment counts as taxable wages, you may choose to defer part of your payout into UTSaver retirement plans:

• UTSaver DCP (457b)
• UTSaver TSA (403b)
• Traditional or Roth options

This can help you reduce or spread out the tax impact of your VSP payout. 

Contribution Limits for 2025

If you have not contributed to these plans yet in the calendar year of your VSP payout, you may contribute up to the maximum limits below.

Maximum Annual Deferral Limits (2025):

• Age under 40: up to $49,000
• Age 50 and older: up to $65,000 (includes normal and age-50 catch-up provisions)
• Age 60–63: up to $71,500 (includes additional catch-up opportunities for this age band)

If you have already contributed earlier in the year, you can still defer — you will just need to subtract what you have already contributed from these limits. 

How Deferring Works

The same process used for deferring annual leave payouts applies to VSP payouts because both are lump-sum payments.

• You will work directly with UTSaver to:
• Elect your deferral amount
• Designate Traditional or Roth
• Ensure your elections are submitted before payroll processes your VSP payout

Deadlines will be communicated during the VSP process.

Benefits of Deferring Your VSP Payment

Deferral may help you:

• Reduce your taxable income for the year
• Grow retirement savings tax-deferred or tax-free (Roth)
• Smooth out the tax impact of a large lump-sum payment

Keep in Mind:

• You must be active in the UTSaver plan before your payout is processed in order to defer.
• Payroll cannot retroactively apply deferrals after the payment has been issued.
• Your age and prior contributions will determine how much you can defer.

Annual salary is 9 or 12-month base pay, including multiple assignments but excluding summer ad hoc assignments. Employees can view base pay in UTShare under Compensation History.

Stipends and other forms of additional pay will not be included.

Yes. Employees can continue to use available accrued vacation and sick leave under the current leave policy guidelines with supervisory approval. Participating employees are required to participate in the transition process; excessive leave will not be approved due to transition requirements.

Yes. Retiree benefits apply whether or not you participate in VSP. A complete list of retiree benefits can be found on our website.

The last day for active employee benefits will be May 31, 2026.

As a retiree you are eligible for retiree benefits from UTA. Optional benefits are the same for retirees as they are for current employees, except that retire cannot enroll in UTFlex.

Those retirees who are eligible for Medicare will be eligible to enroll in our UTCare plan, and retirees who are not yet eligible for Medicare will be eligible to enroll in UTSelect.

You can explore the options here: https://www.utsystem.edu/offices/employee-benefits/insurance/retired-employee-insurance

Vacation and overtime compensation will be paid following your retirement.

Accrued sick leave and straight time is not eligible to be paid. Sick leave will remain in a bank for a year, where should you find employment with a Texas State Agency it would be reinstated.

You can choose to donate your sick leave to the Sick Leave Pool. Learn more here.

No. Only legally required deductions apply.

No. You must remain actively employed through your designated separation date.

Because VSP is a voluntary election, this makes you ineligible for unemployment benefits with the State of Texas.

Salary spreads will be paid in the lump sum incentive payout.

Yes—tenure cannot be retained during phased retirement or post-retirement.

The VSP does not limit any status or access otherwise available under the UTA retirement policy. The policy and approval process for Emeritus Faculty are outlined in the HOP policy.

Yes. Before submitting your VSP application, consult with Dr. Minerva Cordero, Vice Provost for Faculty Success and your department chair to understand your FDL requirements. . 

No. Employees who have signed separation agreements prior to January 12, 2026 are not eligible for this VSP. 

No. Employees on Phased Retirement are considered retired and cannot retire again.

No. The final year after being denied tenure is considered a separation notice period. 

No. Faculty members selecting phased retirement may not conduct research, which is funded through a grant tied to UTA, or directly funded by UTA over the blackout period. 

No. Supervising students is work and therefore cannot be done during the blackout period.