With Defense Bill Passed, FERS Employees to Receive Retirement Credit for Unused Sick Leave
Friday, October 30, 2009(National Federation of Federal Employees)
This week, President
Obama signed the 2010 National Defense
Authorization Act. While a full repeal of
the National Security Personnel System (NSPS)
dominated headlines, one largely underreported
aspect of the bill – and arguably one of the
most important for federal employees throughout
the civil service – was a provision extending
credit for accrued sick leave to federal
workers enrolled in the Federal Employee
Retirement System (FERS).
Under the new law, FERS
employees will receive a boost to their
retirement annuity based on the amount of sick
leave they have saved over the course of their
federal careers. Like their counterparts in the
Civil Service Retirement System, covered
employees will have their accrued leave
factored in their annuity calculation upon
retirement.
Here’s how it works. Once
an employee becomes eligible to retire, their
accrued sick leave will be credited toward
his/her years and months of service. For
example, before the benefit was signed into
law, if a federal employee worked for the
federal government for 30 years, earning a high
three of $70,000 and garnering 6 months of sick
leave, his/her retirement annuity would be 1.0%
x 30 x 70,000, or $21,000 per year.
With this new benefit
included, the same employee would have their
annuity calculated 1.0% x 30.5 x 70,000 or
$21,350 for the year. That’s an extra $29.17
cents in his/her pocket every month upon
retirement.
There is a catch,
however, but only in the short term. Though the
sick leave benefit will go into effect
immediately, it will not do so in its fullest
capacity. There will be a four-year phase in
period during which retiring FERS employees
will receive only half credit for their unused
sick leave. Federal employees can expect to
retire with the full benefit on or after
January 1, 2014.
“We are very pleased that
FERS employees will finally be given credit for
their unused sick time,” said NFFE Legislative
Director Randy Erwin. “Establishing this
good government benefit has been a top priority
for NFFE. Now our retirees are going to
have a little more money in their pocket
because they were dutiful in their service and
rarely used sick time. They earned that
benefit, and now they will get something for
it.”
