House Passes Legislation To Increase Federal Annuity Payments for Some

By on July 31, 2008 in Current Events, Retirement with 0 Comments

What does a bill with a title like the Family Smoking Prevention and Tobacco Control Act have to do with sick leave for federal employees or with the Thrift Savings Plan for federal employees?

Legislation passed by Congress often appears to be addressing one topic but actually concerns something completely different.

Take, for example, the Family Smoking Prevention and Tobacco Control Act. The purpose of this bill is to protect public health by providing the Food and Drug Administration with certain authority to regulate tobacco products.

While the legislation does deal with smoking and the Food and Drug Administration, it also concerns sick leave for federal employees–without regard to their smoking habits or other use of tobacco.

My guess is that most FedSmith readers will have a greater interest in the sick leave provisions of this bill that was passed by the House in July 30th. The bill will have an impact on the unused sick leave for employees who are under the FERS retirement system. Here is what this new law would do and who it would affect.

1. A federal employee who retires within 3 years after the date of enactment, 3/4 of the days of unused sick leave to his credit under a formal leave system will be used in computing an annuity payment.

2. A federal employee who retires after 3 years from the date of enactment the days of unused sick leave to his credit under a formal leave system will be used in computing an annuity payment.

In plain English, this means that federal employees who are under the FERS system would count their unused sick leave toward the computation of their retirement annuity in the same manner as employees under the Civil Service Retirement System (CSRS).

While federal employees get the same amount of leave under both systems, the difference between the systems is that CSRS employees got a better deal when computing a retirement annuity. Those federal employees under the FERS system routinely use more sick leave than those in the CSRS, presumably because the CSRS employees get credit for the leave when they retire. The House bill would, presumably, cut down on the higher sick leave usage by FERS employees if the Senate goes along with the House bill.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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