You may be surprised to learn that, prior to 2009, FERS employees lost their unused sick leave at the end of each year. Understandably, workers made a point to use their sick days before they lost all of that paid time off. As a result, the government had to deal with a lot of empty desks usually toward the end of the year.
After a new law was passed by President Obama, up to 50% of unused sick leave could be used to calculate a worker’s monthly pension (annuity) for those who retired through December 31, 2013. Starting on January 1st, 2014, 100% of unused sick leave is counted as creditable service when calculating a FERS retiree’s monthly pension.
The Value Of Unused Sick Leave
If you were hoping your days of unused sick leave could help make you eligible for retiring with an immediate annuity, you’re out of luck. Unused sick leave is never added to your years of creditable service to determine your eligibility for retirement under FERS.
That’s the bad news. Here’s the good news: once you meet the age and service requirements for an immediate, unreduced annuity under FERS, your unused sick leave is added to your years of creditable service to increase the amount of your annuity (pension).
“If you’re a full-time worker, a half-day of sick leave is accrued each pay period. This works out to four hours every two weeks for a total of 13 days (104 hours) every year.”
How Unused Sick Leave Is Calculated
For retirement credit purposes, sick leave days are approximately 5.8 hours long. Under federal rules, there are 2,087 hours in a full work year. OPM divides this number by 360 because, when calculating for retirement, all 12 months are considered to be 30 days long.
If you’re a full-time worker, a half-day of sick leave is accrued each pay period. This works out to four hours every two weeks for a total of 13 days (104 hours) every year. For federal workers who retire under FERS, each year of unused sick leave increases your annuity by 1%. If you retire at age 62 or later, and you’re eligible for the FERS Bonus, then the multiplier is increased to 1.1%. (Note: For CSRS retirees, each year of unused sick leave increases your annuity by 2%.)
If You Separate From Service Before You Retire
When you leave your federal job before you’re eligible to retire, unused sick leave will not be applied to calculating the amount of your annuity when you apply for your pension at a later date. However, if you’re re-employed by the federal government, your hours of unused sick leave will be restored to your record to calculate the amount of your benefit.
Source: www.OPM.gov.
