Is my company forcing me to quit under the guise of offering a very low relocation allowance

I have a couple of decades at my organization. Got great reviews for performance in the past. Recently they nudged someone in my group to retire. Than they replaced him with much senior guy who has tremendous expertise and has a lower job grade than me. Now in a few weeks of that new guy joining, they terminated my position and are offering relocation. The termination comes with severance which is according to company policy. The relocation comes with relocation allowance that will not cover a fraction of my relocation expenses. Plus they have given me a verbal understanding, that I would end up in a different group. They have given me 2 weeks to make my decision and will pay for that period.
Question is :
1. Are they trying to get me to accept the termination ?
2. If so, is there reason why are not terminating me directly ?
3. Is there some way they benefit OR i lose by accepting the severance package.
4. If i relocate, will they terminate me once they place me in a new group.