# Your Unused FERS Sick Leave: How Much is it Worth At Retirement?

on March 19, 2010 with

Until late last year, FERS employees in the twilight of their careers were faced with a dilemma: “What should I do about my sick leave?” If I use it up (“burn it”) during the year or so prior to retirement, I will be cheating. But if I am honest about it, then I will lose something of real value—the sick leave will simply vanish at retirement. What should a FERS employee do?

Fortunately, Congress passed and the President signed into law, a bill to remedy this situation. (See President Signs Defense Bill: Includes Credit for Sick Leave and Abolishes NSPS)

FERS employees now receive credit for their sick leave, at retirement.

Here is how this works.

When a FERS employee retires, he or she receives 1% of his high-three salary for each full year of service, and one-twelfth of 1% for each month.

At retirement, the sick leave balance used for his annuity is reduced by half. Then, for each 348 hours of sick leave, one month is added to his service time. Beginning in 2014, the hours will no longer be reduced by half; instead, the employee will be credited at the rate of one month for 174 hours.
Here is an example:
• Frank has a high-three of \$74,287 and a sick leave balance of 1,292 hours. First, the 1,292 hours are reduced by half, to 646.
• The 646 is then divided by 174 and rounded down to the nearest whole number (646 / 174 = 3.71, rounded = 3).
• This equates to three additional months of service, or 0.25% of the high-three.
• One quarter of 1% times \$74,287 = \$185.71.
• The \$185.71 is then divided by twelve to arrive at the exact increase in Frank’s monthly annuity: \$15.47.

A person with the identical figures as Frank, retiring on/after January 1, 2014, will see an increase of \$30.94, because the sick leave balance will no longer be halved.

What happens to the “leftover” sick leave?

In Frank’s case this amounts to 124 hours. Unfortunately, it is lost, unless…if the leftover service time, combined with the leftover sick leave hours, is equal to or greater than one month, then Frank gets credit for one additional month.

How much is FERS sick leave worth? Not a great deal, but certainly better than nothing!To do the above arithmetic quickly and easily, just go to fedbens.us and click number 7 on the menu. (Editor’s note: The program referenced will not work on all computer systems.)

Robert Benson served 35 years in various Federal agencies, as both a management analyst and IT specialist. He is a graduate of Northwestern University.

### 5 Replies

1. MARGEJENSEN says:

I WOULD LIKE TO BACK MY WORK TIME UPO FROM MY RETIREMENT DATE BY THE 50% HOURS AND LEAVE FOUR WEEKS EARLIER.Â  iS THAT POSSIBLE?

2. faaguy says:

What I ‘ve seen in the agency where I worked was the reluctance of employees to take legitimate sick leave throughout their careers.Â  This prolonged their colds, flu viruses, etc., not to mention the risk of others catching their diseases.Â  Later in life, an older person is more susceptible to such disease and still is reluctant to take sick leave.Â  I would heartily suggest that one take his sick leave as needed and would not be in a position to be concerned about monetary considerations during retirement.Â  One might consider a goal of no sick leave left upon retirement, if needed to recover from an illness.Â

Too many of us are “overly loyal” to the agency where we are employed.Â  We sacrifice our health and recovery and put our fellow employees and the public at risk, too.

• Wilbert Morell says:

I seldom used sick time, I used my annual leave for doctor and dental appointments and if sick I did the same throughout my 30 years being on FERS. When I fell off my roof and fractured nine ribs during Hurricane Katrina, I was glad I did that. I have 1218 hours of sick leave if I need it and carry over 240 hours of LA ever year. Folks that don’t abuse it are in better shape then those who abuse it, and beg for others to donate their annual leave when tragedy occurs. Government workers are very caring people when it comes to helping their peers when this happens.

3. Manage This! says:

Ok, its pretty obvious that many of you missed the mark in understanding the point – and given the math in the example – I can see why this has become so confusing.Â  In relative terms if you earned a full year of sick leave -2087 Hours (2088 for the computation to work properly) and you lived at least 30 years past the retirement date, then it would work out that the 1% of your retirement that you are getting paid is equal to you working at a minimum wage job – full time – for one year or simply put that one year of sick leave – you were working a second job full time, for one year (in the example it works out to \$10.6785/hr if you had 2088 hrs of sick leave at retirement).
2088/174 = 12
12 / 12 = 1% = .001
.01 * \$74,287 = \$742.87 (annually)
\$742.87 * 30 = \$22,286.10 (30 years of earnings in retirement)
\$22,286.10 / 2088 = \$10.6734 / hour for one year.
\$74,287 / 2088 = \$35.578 / hour on date of retirement.

Now, granted – you could take the sick leave – have a healthy exercise or do the doctors thing and obtain the immediate benefit, but, like most western thinking – its all about immediate gratifications.Â  If you consider the long term, and actually did the right things to your body so you could have a reasonable chance at living another 30+ years, your benefit is actually more than you realize.Â  Say you lived for another 10 years for a total of 40 years, that would bring your total to \$29,714.80 or \$14.23/hr and if for some unexpected reason you made it another 10 to 50 years, \$37,143.50 or \$17.7976/hr = wow, 50% of your working salary for one year.

So, in perspective – if you didn’t take theÂ sick leave and sold it at retirement (after 2014),Â and you live another 50 years.Â  Your SickÂ LeaveÂ would be paying you the equivalent of having worked a part time job at 40 hours a week for half of your hourly rate.Â  Even if you only lived 20 years past retirement, you would still be getting \$14,857.40 or \$7.1190/hr – just under the minimum wage for that one year of doing nothing but being honest about work and your responsibilities.

If your body and life are in such a mess that you don’t expect to live more than 20 years past your retirement, you really have a lot more to worry about than getting paid for your sick leave or even taking it (properly or not).Â  Get your focus on long term living and you benefit on all ends of the evaluation.

Oh, and one last point – a worker starting this year and taking no sick leave over their 30 year career would accumulate (30 x 26 x 4) 3120 total hours, just a bit less than 1.5 years of sick leave.Â  If that were used in the computation, things change a bit more and you discover that the payoff is enough to actually think this through and use your annual leave for appointments where you can instead of your sick leave.Â  \$74,287 * .015 = \$1,114.31 that, over 30 years in retirement = \$33,429.15 or about \$16.0178/hr for one year of doing nothing.

In a true perspetive – it means you are getting paid more for the price of trading a day off versus a day of work which pays you the same rate regardless – your only benefit being you took time off – probably to spend your money on something you didn’t need to start with.

4. guest says:

I’m not the sharpest tool in the shed and I got to say this article just confused me.
So if I retire after 2014, then I get full credit for sick leave- if I have 174 hours of sick leave I get credit for working one month?Â  Or do I have to have 348 hours of leave to get credit for one month.
I’m looking are retirement in 2015 so an answer would be greatly appreciated – I’d love to go in November and get credit for working the full year.

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