Federal Employees to Receive Retirement Credit for Unused Sick Leave
Tuesday, November 3, 2009
President Obama signed last week the 2010 National Defense Authorization Act. While a full repeal of the National Security Personnel System (NSPS) dominated headlines, one largely underreported aspect of the bill—and arguably one of the most important for federal employees throughout the civil service—was a provision extending credit for accrued sick leave to federal workers enrolled in the Federal Employee Retirement System (FERS).
Under the new law, FERS employees will receive a boost to their retirement annuity based on the amount of sick leave they have saved over the course of their federal careers. Like their counterparts in the Civil Service Retirement System (CSRS), covered employees will have their accrued leave factored in their annuity calculation upon retirement.
"We are glad to see FERS employees will be treated the same as CSRS workers with regard to unused sick leave," said National President David Holway. "Federal employees earn that leave, and it isn't right for a career of dutiful service to go completely unrewarded by having months of sick leave essentially wiped away. From now on, FERS employees will get credit for their unused sick time."
Here's how the new provision works. Once an employee becomes eligible to retire, their accrued sick leave will be credited toward their years and months of service. For example, before the benefit was signed into law, if a federal employee worked for the federal government for 30 years, earning a "high three" of $70,000 and garnering 6 months of sick leave, their retirement annuity would be 1.0% x 30 x $70,000, or $21,000 per year.
With this new benefit included, the same employee would have their annuity calculated 1.0% x 30.5 x $70,000 or $21,350 per year. That’s an extra $29.17 per month in their pocket upon retirement.
There is a catch, however, but only in the short term. Though the sick leave benefit will go into effect immediately, it will not do so in its fullest capacity. There will be a four-year phase in period during which retiring FERS employees will receive only half credit for their unused sick leave. Federal employees can expect to retire with the full benefit on or after January 1, 2014.