The last two weeks we’ve looked at the range of allowable uses of sick leave, including those beyond personal illnesses. On top of that, when you retire any unused hours of sick leave will be used to increase the amount of your annuity. Who could ask for anything more?
When you retire any unused sick leave hours will be converted into retirement months. By law, 2,087 hours equals one year of service.
If you are a CSRS retiree each month of unused sick leave will increase your annuity by 1/6th of 1 percent. For example, if you have six months of sick leave, it will be increased by 1 percent. If you have a full year it will be increased by 2 percent. And so on.
If you are a FERS retiree, each year of sick leave will increase your annuity by 1 percent, each month by 1/12 of 1 percent. If you retire at age 62 or later with at least 20 years of service, the multiplier will be increased from 1 percent to 1.1 percent per year.
How much credit you’ll get for your unused sick leave depends on whether you have any hours of actual service that don’t add up to a full month. If there are any hours left over, they’ll be converted into retirement hours and added to the hours of unused sick leave you had on the day you retired.
For retirement purposes, all days are 5.797+ hours long. That number is derived by dividing 2,087 – the total hours of work in a year – by 360. (That last number is used because annuity payments are based on 12 30-day months.) Any days that don’t add up to a full month, when added to any actual days of service beyond a full month, are dropped.
If you are a FERS employee who will have a CSRS component in your annuity, any sick leave hours up to the maximum number you had when you transferred to FERS will be credited to your CSRS annuity. Any sick leave hours above that amount will be credited to your FERS annuity.
To be eligible to retire you have to meet the age and service requirements. If you are a FERS employee who meets the requirements but decides to postpone the receipt of your annuity to a later date, your sick leave balance will be included in your annuity computation when you do retire.
However, if you leave government before you are eligible to retire and later apply for a deferred annuity, you won’t get any credit for your unused sick leave. However, you can have your sick leave balance restored if you are rehired by the government.
Just to be clear. Unused sick leave can’t be added to your actual service to make you eligible to retire. It can only be used to increase your annuity once you have met the eligibility requirements.
Source: Fedweek
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