Sick leave and retirement

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Q. Can the sick leave balance be used to push a retiring employee beyond the 20-year point? If the worker, older than 62, wants to retire on Feb. 1 but is five months short of 20 years and has 5½ months of sick leave, will the balance push the service beyond 20 years?

A. Employees who are age 62 or older and have at least 5 years of creditable service may retire at any time. As for the annuity they will receive, it will be based on their years and full months of service. Any leftover days will be added to their sick leave balance and used to increase the amount of their annuity. Note: Leftover days and unused sick leave are combined and converted to retirement annuity months. On average, a retirement month is 174 hours long.

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About Author

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

4 Comments

  1. Billy Birdwell on

    I think this means “yes.” If the employee’s combined service (years/months plus leftover and sick leave) push the employee beyond 20 years, the annuity factor increases from 0.01 to 0.011. Not a big difference, but big enough to be worthwhile in some cases.
    Let me know if I’m wrong.

    • The impact of sick leave on the FERS annuity computation (to get to 20 years’ service) is a common question in Federal Retirement forums, but the answers provided seem to generate more questions than answers. Based on various forum responses, unused sick leave cannot be used to become ELIGIBLE for retirement, but it can be used in the COMPUTATION. For example, an employee who is at least age 62 only needs five years of creditable civilian federal service to be ELIGIBLE for an immediate unreduced FERS retirement, and an employee who retires at age 62 or later with 20 or more years of creditable service will have their benefit computed using the 1.1 percent multiplier (instead of 1.0 percent).

      So the answer to: “Can sick leave balance be used to push a retiring employee beyond the 20-year point? If the worker, older than 62, wants to retire on Feb. 1 but is five months short of 20 years and has 5½ months of sick leave, will the balance push the service beyond 20 years?” is “YES” based on the fact that rules for the COMPUTATION of the FERS benefit after age 62 are different. This is according to a Retirement expert on another Federal forum. Unfortunately, no further specifics or references were provided. Also, OPM and my local HR have been unable to provide further clarification.

      It would be great if someone could clarify (and provide references) as to why the COMPUTATION rules change after age 62 and if this applies under MRA+10 as well. For example, if a FERS employee retires under MRA+10 at age 57 with 19 years of service, will his one year of unused sick leave allow him to collect an unreduced annuity at age 60 (as opposed to age 62 with less than 20 years)? Or does this only apply to those who retire at age 62 or later AND only apply to the 1.1 percent multiplier eligibility benefit? To be clear, I am not referring to unused sick leave balance which is added to the retiree’s service length for annuity computation purposes – that is added regardless if someone retires under MRA+10 or Age 62 & 5+years.

      • According to OPM, only actual service can be used to qualify an employee to retire. Unused sick leave is only added after that actual service requirement is met.

  2. Or this person can just put off retirement for another 5 1/2 months and retire in August vs February with 20+ years of service to qualify for the FERS over 62/20+ years service bonus! They already made it 19 1/2 years, 6 more months working won’t hurt.

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