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. Order your copy at shoplrp.com. Ask your human resources office to contact Federal Career Experts about pre-retirement training.