15 Weeks? New EPL Benefit May Impact Your Federal Retirement Date

What is EPL, and will it impact your “high-3” and your retirement date?

Federal employees have been reading a lot about “EPL” in recent months.

EPL is an acronym for “Emergency Paid Leave.” It is a new, temporary paid leave program established in the American Rescue Plan for federal employees impacted by COVID.

When President Biden signed the American Rescue Plan Act of 2021 (H.R. 1319) into law, there was an additional benefit for federal employees in the mix. In addition to more stimulus checks, the bill contained a key provision unique to federal employees: emergency paid leave.

The paid leave benefit is a very broad leave program that will enable a number of federal employees to take an additional 15 weeks paid leave. This is in addition to the regular paid leave program for federal employees that includes both annual leave and sick leave.

EPL is only available until September 30, 2021, unless the applicable fund is exhausted before then.

There are eight qualifying circumstances for using this additional paid leave program. For more on this, see OPM Issues Guidance on COVID Emergency Paid Leave.

Your “High-3”, EPL and Your Retirement Date

Government benefit programs are always complex. EPL is no different.

There is a kicker that will not impact everyone who has or will take emergency paid leave, but it will impact some who are carefully planning their future retirement date.

Here is guidance issued by the Office of Personnel Management (OPM) on this issue:

Basic pay generated by EPL is subject to retirement deductions and contributions in the same manner as basic pay generated by other types of paid leave. The total hours of EPL an employee receives will reduce the total service used in the annuity calculation. EPL remains creditable for establishing eligibility to a retirement annuity benefit and for purposes of computing a retiree’s high-3 average salary.

EPL and Your Total Federal Service Calculation

Note that using your EPL benefit may impact the total federal service calculation for some federal employees. If you have used EPL or will be using it, pay attention to this paragraph in the OPM guidance:

Calculation of retirement benefit. — Any paid leave provided to an employee under this section shall reduce the total service used to calculate any Federal civilian retirement benefit.

Under the American Rescue Plan Act, a federal employee could use as much as 15 weeks of emergency paid leave. That is a generous benefit and a great deal of paid time off of your work as a federal employee.

If you are a federal employee who uses this amount of extra leave, pay attention to this cautionary point. The paid leave you receive will “reduce the total service used to calculate any Federal civilian retirement benefit.”

For most future retirees, this will not be significant. But, if you and your spouse have made big plans to celebrate your retirement and you have booked a celebration event right after your retirement, ask yourself this question: “Would delaying my retirement by a few weeks impact this planned event?”

Using EPL should not impact your future plans…if you plan in advance. If you do not plan in advance, the government will consider a lack of preparation in following the rules will be your own fault.

As OPM notes in its guidance, “5 U.S.C. 8334 and 8422 require the employing agency to deduct retirement deductions from an employee’s basic pay. Section 4001(c)(4) of ARP mandates that EPL hours are not creditable in the retirement annuity computation. OPM does not have the authority to change these requirements.” (emphasis supplied)

EPL and Your “High-3”

With regard to your high-3 average salary computation, pay attention to the fact that EPL will count in calculating your high-3 average salary. This assumes that the employee is otherwise eligible for retirement coverage.

Conclusion

The Emergency Paid Leave provision is a benefit that will be valuable to at least some federal employees. Congress has set aside a fund of $570 million to provide this benefit. (EPL is only authorized when paid out of this fund.)

While the benefit is generous to the federal workforce, pay attention to the “fine print” of the legislation and the OPM guidance to avoid any unpleasant surprises.

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. Follow Ralph on Twitter: @RalphSmith47

Leave a Comment