It’s important to understand how annual leave is accrued and how much you can carry over each year. Federal employees have the right to use their annual leave for vacations, a time out to rest and relax, or for personal reasons and family emergencies. However, with strategic planning, it’s possible to accrue a good amount of annual leave and build a sizeable lump sum payment for retirement.
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):
- Less than three years of service: 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).
- 15 years of service and above: 8 hours per pay period (26 days a year).
It’s important to note that the rules for crediting leave accrual 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 carry-over allowed must be used before the end of the leave year, or you will lose them.
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 federal employees retire before the end of the current leave year, they’ll be paid a lump sum for the balance of annual leave in their account. As long as retirement occurs before the new leave year begins, any leave that’s above the carry-over limit won’t be lost. This lump sum payment comes in handy to help cover your living expenses while waiting for your first interim annuity payment, which, given the recent surge in retirement applications, could be longer than anticipated.
For more information, reach out to a Federal Retirement Consultant (FRC®) who specializes in helping federal employees navigate their complex benefits.
