Not all of us are aware of how sick leave and annual leave are treated when we separate from federal service.
What prompted me to write this article is that, twice in the twenty-four hours that preceded my sitting down at the computer to put this article together, I received emails from federal employees who thought that unused sick leave counted towards their eligibility to retire. That is not true. Once you have become eligible for a federal annuity (either CSRS or FERS), your unused sick leave is added to your length of service for the computation of that annuity.
CSRS employees have been getting full credit for their sick leave in computing their pensions since 1969. FERS employees began receiving full credit for their sick leave in annuity computation since 2014.
If you separate from federal service without title to an annuity, your sick leave has no value; though it can be re-credited if you later return to the federal workforce.
There are several misconceptions about how sick leave is credited for retirement purposes. The most common one is that an individual must have their sick leave in even month increments in order for it to increase one’s length of service. This is not true.
While it is true that only years and months (not days) of service are used for length of service purposes, the extra days are not dropped from the computation until sick leave is added to time actually worked. The following example will help explain.
An employee’s length of service is determined by subtracting their retirement service computation date (SCD) from the date they retire. Be aware that for some people the retirement SCD may be different from the leave accrual SCD that appears on an individual’s SF-50. If you have any doubt as to your retirement SCD, consult with your benefits specialist, check your annual benefits statement or utilize your agency’s automated HR system (e.g., EBIS, etc.)
|Length of Service||32||07||16|
Sick leave is converted from hours to months and days of service and is then added to the computation.
In the example that follows, 1,513 hours of sick leave (8 months and 21 days on the chart) is used.
|Length without S/L||32||07||16|
|Total length of service||33||04||07|
At this point, the seven remaining days of service are dropped. In the above example, once we have completed the math and dropped the excess days, the 8 months and 21 days of sick leave resulted in a 9 month increase in length of service.
What about unused annual leave? An employee who separates from federal service (either by retiring or by another method) will be paid for the value of their unused annual leave. This causes many employees to wait until near the end of the year to retire, so that their annual leave payment will be larger.