Sick Leave Phase In

Wednesday - 6/30/2010, 4:00am EDT

Senior Correspondent Mike Causey has stepped away from the keyboard for a much-needed break. While he catches up on his anime watching, we present "The Most Popular Federal Reports". This column was originally published on October 13, 2009. Bear in mind some details may have changed since then. sk

Under a phase-in plan okayed by Congress, FERS employees who want to get full credit for unused sick leave will have to wait until January 1, 2014 to retire. They can leave earlier than that, but if they do, they will get only partial credit toward retirement under the phase-in rules.

The change, which will give FERS employees the same incentive to save sick leave that has long been enjoyed by CSRS employees, is part of the compromise Defense Authorization bill heading for the White House.

Between 70 and 80 percent of all federal workers (mostly people hired after the mid-1980s) are under the FERS plan. Congress set it up to succeed the old Civil Service Retirement System. CSRS was great for lifers. But fewer than 30 percent of all feds work long enough to be eligible for government retirement benefits. So Congress setup the FERS program in the mid-1980s with a very generous 401k plan option and Social Security. Both of them are "portable" in the sense that they can be transferred to another job in the private sector.

In going from CSRS to FERS Congress made some trade-offs.

FERS workers get a tax-deferred government match of up to 5 percent to their Thrift Savings Plan accounts. CSRS employees don't.

FERS workers contribute less to the civil service retirement fund but do pay for and earn Social Security credits.

CSRS employees get a full cost of living adjustment each year, regardless of their age at retirement. FERS employees get a diet-COLA (1 percentage point less than the rise in inflation) and only after they reach age 62.

Right now that's a moot point since there will not be a (was no) January cost of living adjustment for Federal retirees, military retirees or people who get Social Security benefits.

After years of lobbying, groups representing federal workers, managers and retirees finally convinced Congress to give FERS employees the same incentive to save sick leave it gave, years ago, to CSRS workers. It works like this: When you are otherwise eligible to retire you can credit unused sick leave toward your service time. Adding one year of sick leave (2080 hours) to service time will boost a CSRS annuity about 2 percent. Adding the same time to a FERS annuity will increase it about 1 percent.

But the change for FERS employees isn't immediate.

Here's a summary of the new FERS sick leave credit, courtesy of the Federal Managers Association:

  • "The conference committee approved a measure which would credit FERS employees for unused sick leave at the time of retirement. Due to concerns over the cost of the provision, lawmakers approved language that would phase in the credit over four years.

"During this time period, FERS employees would receive a 50 percent credit for unused sick leave; FERS employees who retire after January 1, 2014 will receive full credit for their unused sick leave, placing them on par with their Civil Service Retirement System (CSRS) counterparts. The FERS sick leave phase-in marks a compromise over legislation approved in the House-passed version of the FY10 Defense Authorization Act."

To reach Mike: mcausey@federalnewsradio.com


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Mike Causey is out this week, so we bring you an encore presentation of a recent program. He talks with Dan Adcock, legislative director of the National Active Retired Federal Employees, about where legislation is in the House that would allow you to move unused annual leave into your TSP after leaving federal service. Then, Randy Erwin of the National Federation of Federal Employees talks about why some in Congress are keen on freezing federal pay and benefits. Read more and listen here.

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