Excess contributions

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Q. How would 1,134 hours of sick leave be applied to my CSRS retirement? Currently I have 46 years and 10 months of government service. I am 62 years old. Can sick leave be credited toward my high-3 percentage. For example, instead of 80 percent of my high-3, Will I be entitled to get 1 percent added to my retirement income?

A. The maximum earned annuity you can receive is 80 percent of your high-3. You reached that limit when you had 41 years and 11 months of service. Since retirement contributions continued to be taken from your pay after that point, those excess contributions will be returned to you with the option of keeping the money or purchasing additional annuity, which isn’t subject to the 80 percent limit. Also not subject to the 80 percent limit is unused sick leave. Your 1,034 hours would convert to six additional months, which would increase your annuity by 1 percent.

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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 fedexperts@federaltimes.com.

2 Comments

  1. Hi Reg,

    I’m almost it the same category as this person (but with 41 years service) and I have an additional question. Will the excess retirement contributions be tax free? So this person (and me in 6 years) would be getting over 1/3 of a years salary (5yrs*7%=35% of an averaged 3 year salary) returned to them tax free?

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