Thread: FERS Retirement Credit for unused sick leave stalls:

Sick Leave Phase In...

October 13, 2009 - 4:00am

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 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."

http://www.federalnewsradio.com/?nid=20&sid=1784010

I have mixed feelings about the whole thing. I am pleased to have the benefit but I am disturbed that it had to be "slipped" into a Defense bill.

IMO, this is one of the fundamental problems with our Legislative Branch.

That's how they are going to get the Socialized Medical plan passed, by attaching, as admendments to a bill that has already been approved by the house. Wait and see. Run'em all off.

Well, as previously stated - it's neither here-nor-there with me anymore as I've just recently retired

but -

those still working and not feeling quite up to snuff on any particular mornings will have to consider whether it's financially better to

A. drag themselves into work to save the s/l & get 50% service time credit for it when they retire.

or

B. take the s/l & earn 100% of the service time credit, plus get paid for it, plus get TSP matching funds.

hmmmmm.

We should know today whether FERS Sick leave provision survives.

The Senate began debate yesterday on the Defense Authorization bill, which contains the language on FERS Sick leave. It's been through the House, the Senate, back to the House, and now the Senate is taking up the final conference report yesterday and today.

They may vote on the final conference report today.

Senate considers final conference report on HR 2647 starting at 9:30a.m. today.

http://www.senate.gov/pagelayout/leg.../calendars.htm

Help me with the math real quick.

Say for simple math sake my base is $100,000 a year and I save 2080 hours of sick leave before I retire. Mind you I drag myself to work on day I don't feel well and my production is weak, I make errors, I make co-workers sick too.

Now, 2080 hours is one man year added to my retirement with a high three of $100k, so that adds 1% to my high three retirement for FERS or $1,000.

I would have to live well over 100 years to recoup the full face value of the sick leave and that is not counting the 10 holidays or TSP matching funds.

At $100k salary that equals $48.07 a hour wages.

So, using just 3 sick days or have Doctor/Dentist appointment a year, or 24 hours, that will equal more than the added benefit to my FERS.

ROFLMAO

I don't feel well I will USE my sick leave. Doctor and Dentist appointments, dependent care for wife, kids, parents, etc.

Is my math wrong, please help?

The problem isn't using a sick day when you need it. And it's not about recouping "full face value", as you put it.

The problem is that there is no incentive NOT to use a LOT of that sick leave in the last year or two, when you DON'T need it. The FERS FLU means people are taking a day here, taking a day there, and by the time it's over, they are just gone a whole lot.

While this solution doesn't automatically solve everything, it takes away the incentive to be gone all the time.


Now, one more thought-

In the private sector-
The President has proposed allowing sick leave to be cashed out (at full face value) IF it is put into a 401(k) retirement account.

How much of a leap is it then to do likewise for TSP and Federal employees?

Not a big leap.


But first, this Senate bill today is the first step in getting something in place to curb FERS Flu and issue fundamental fairness for the work force i.e. CSRS vs. FERS equality in treatment.

The Senate just voted 64-38 for Cloture, meaning that the bill now is ready for a final vote.

Sick leave for FERS is included in section 1901 of the conference report.

We'll now shortly whether it passes. The next vote on the Defense Authorization Bill will be the final vote for this legislation, before it goes to the President's desk.

Cross fingers. The final vote should happen later today.

Final vote on the FY2010 Defense Authorization Bill- it passed in the Senate--, 68-29.

Now it's on to the President's desk for signature.

I'm glad it passed.

As noted above, the next step is to get full credit for sick leave.