What Impact Does Unused Sick Leave Have on My Annuity?

By on October 13, 2015 in Q&A with 20 Comments

Q: I plan on retiring with 42 years and 7 months of service in Jan 2017. I will have accumulated 2500+/- hours of sick leave balance at time of retirement. I am in CSRS, so I was wondering what the increase in my annuity, expressed as a percentage, above the 80% value, would be due to credit for sick leave. Is this additional annuity based upon some incremental portion of the year or daily? I presume that OPM has some formula for figuring that out but I have not been able to find that.

A: OPM turns your hours of sick leave into months and days of service, which are then added to your length of service for the purpose of computing your federal pension. Crediting unused sick leave is an exception to the 80% limit on a CSRS pension. Someone, such as yourself, who has hit the 80% mark will still have their sick leave added to their length of service, thereby increasing their pension. A year’s worth of time is considered to be 2087 hours of sick leave, so you will have more than one year or sick leave at the time you retire. Chapter 50 of the CSRS/FERS Handbook for Payroll and Personnel offices has a conversion chart. I couldn’t get a direct link to the chart, but here’s a link to Chapter 50.

Let’s say that you have exactly 2500 hours of sick leave. 2087 equals one year and the remaining 413 equal 2 months and 12 days. You would be credited with one year and two months of service over and above the 80% that you have earned by working 42+ years. All years of CSRS service, after your first 10, are worth 2%, while months would be worth 1/6 of 1%, and days are worth nothing. Your pension (once the sick leave is added) would be 82.4167% of your high-three.

You’ll have a comfortable retirement.

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.

© 2016 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

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About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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