Before you retire, it’s important to understand how annual leave is accrued and how much you can carry over each year. As a federal employee, you have the right to use your annual leave for vacations, a time out to rest and relax, or for personal reasons and family emergencies. However, with strategic planning, you can accrue a good amount of annual leave to build a sizable lump sum payment when you retire.
Annual Leave Accrual Rules
Whether you’re a FERS or CSRS participant, the accrual rules are the same (for part-time workers, the following amounts are prorated according to hours worked):
- With fewer than three years of service, you earn 4 hours per biweekly pay period (13 days a year).
- Between 3 and 15 years of service, 6 hours per pay period (20 days a year).
- Once you reach 15 years of service, you earn 8 hours per pay period (26 days a year).
It’s important to note that the rules for crediting accrued leave do not affect crediting toward your retirement eligibility or the calculation of your retirement benefits.
Carry Over & “Use It Or Lose It” Rules
Though the number of annual leave hours you can carry over from one year to the next depends on your employment category, for the majority of GS workers the maximum is 240 hours. Any hours of annual leave above the yearly maximum allowed must be used before the end of the leave year or you will lose it.
According to the OPM, a leave year begins on the first day of the first full biweekly pay period in a calendar year. It ends on the day immediately before the first day of the first full biweekly pay period in the following calendar year. Since some agency payroll systems use a different pay period schedule, contact your agency to verify the beginning and ending dates of a particular leave year.
If You Retire Before The End Of The Current Leave Year
When you retire before the end of the current leave year, you’ll be paid a lump sum for the balance of accrued annual leave in your account. As long as you retire before the new leave year begins, you won’t lose any leave that’s above your carry-over limit. This lump sum payment comes in handy to help cover your living expenses while waiting for your first interim annuity payment, which can take as long as a month or more after you retire.
Contact an FRC® trained advisor to learn more about your unique federal benefits.
