Focus on good points of unused-sick-leave credit


Some Federal Employees Retirement System employees are unhappy with the credit for unused sick leave they finally won because it isn’t worth as much as they hoped it would be.

Let me turn back the clock. At its beginning in 1987, FERS precluded retirement credit for unused sick leave. This was a significant departure from what has been allowed under the Civil Service Retirement System since 1969. A study at that time revealed that as CSRS employees approached retirement, they burned off their sick leave at an alarming rate. About half of all retiring CSRS employees had zero sick leave balances, and the other half had an average of only 44 days when they retired. And managers were turning a blind eye to what was going on.

In 2004, the Congressional Budget Office compared the sick leave of CSRS and FERS employees as they approached retirement. They discovered that FERS employees used sick leave at a far greater rate and had lower sick leave balances than their CSRS counterparts.

Surprise! On Oct. 28, 2009, the president signed a law that permits FERS employees to get credit for their unused sick leave. They get half credit through Dec. 31, 2013, and full credit if they retire on or after Jan. 1, 2014.

Are the complaints from those getting half credit? No. They’re from those who plan to retire in 2014 or later.

Why do they think they are ill-treated? Let’s say you are a FERS employee who has met the age and service requirements to retire. In most cases, that’s at your minimum retirement age (MRA) with 30 years of service. Let’s say your high-three — your average annual salary over your three highest-paid years — was $62,000. Your annuity, based solely on actual service, would be $18,600 — 1 percent of $62,000, multiplied by 30 years. If you had six months of unused sick leave, your annuity would be increased for a new total of $18,910 — 1 percent of $62,000, multiplied by 30.5 years.

The additional sick leave credit would give you $310 more a year, or around $26 more a month. The complainers don’t think that’s much compensation for having saved up a lot of sick leave, instead of burning it off.

I don’t have to tell you, dear reader, that to use sick leave for unapproved purposes is a violation of law and regulation. So we can set that aside as an option.

Instead, we need to focus on what makes the new law a good deal for FERS employees. In the example I just cited, that employee is not only getting more money but he would have had to work six months longer to receive the same annuity that he’ll now get by having his sick leave added on. And the more sick leave a retiring employee has, the larger his annuity will be.

If those who are unhappy with the small dollar value of the increase have any complaint, it’s with the multiplier used in the FERS annuity computation, which is 1 percent instead of the 2 percent that CSRS employees get if they have 10 or more years of service. However, it needs to be remembered that unlike CSRS, FERS is a three-part retirement system. FERS consists of a defined benefit plan — the annuity — Social Security and the Thrift Savings Plan into which the government puts matching funds.

A word of advice: When the public and legislative winds aren’t favorable, it’s time to trim your sails. Save your energy for things that will help your cause. Don’t complain about issues that are marginal or, in this case, wrongly interpreted. You’ll only convince your detractors that they were right about you all along.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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