Lump sum or terminal leave


Q: Suppose a CSRS employee has more than two months unused Annual Leave and plans to retire soon. I understand employees can get a lump sum payout for unused A/L. Yet it seemed one can alternatively request permission to take two months of A/L starting at the time he wants to quit and officially retire after spending the A/L. In that way, he sacrifices the lump sum payout to gain two extra months of service credit which boosts his CSRS pension. Self-calculations indicate that is a significant boost, but it seems most people opt for lump sum. So there may exist factors I am unaware of. Thus, will you please give your opinion on whether the lump sum payout or asking one’s boss’s approval for “terminal” A/L, leaving immediately upon using up the A/L, is desirable.

A: There is no provision in law or regulation that would allow you to take what amounts to terminal leave. If memory serves, there was a comptroller general decision that negated this option, pointing out that while on annual leave, the employee would be earning both annual and sick leave, thus creating an unwarranted windfall.


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