FERS Flu Part Deux

In the good old days (hah!) sick leave, if you worked for a progressive company that offered it, was for when you were sick. Period. A sick spouse or kid didn’t hack it. Mental health days had yet to be invented.

While it’s a good bet that some of our forefathers (and foremothers) took sick leave when they were perfectly well, it probably was the exception.

But times have changed.

Most companies now offer sick leave. But in many cases it’s a use-it-or-lose it deal. Many firms don’t let people accumulate sick leave. The only one that I know of that allows workers to build up sick leave and cash it in (in the form of retirement credit) is the U.S. Government. And it only does it for CSRS employees who make up about one-quarter of the workforce.

For the majority of feds, under the FERS retirement program, sick leave is a use-it-or-lose it deal. And it appears that an increasing number of people burn up their sick leave (saving their paid annual leave) in the year or two before retirement. Congress next year will decide whether and how to give FERS employees some incentive to save their leave. It was the subject of a FERS Flu column last week. You can check it out here.

The column triggered a bunch of suggestions and comments that might be helpful to the politicians trying to cure the FERS flu.

Here are a few of them:

  • “Under . . . FERS, sick leave disappears right off the books at retirement. That’s unacceptable since Feds earned it with time served…if employees can’t convert that leave into extra service time upon retirement, why not arrange things so the employee might have an option to donate that leave balance to a leave bank?”
  • “What is surprising about FERS flu, is how inexpensive it would be to cure. Allowing the same credit that CSRS get at the end of their career would be about half of the cost for a 40 year career (CSRS 80% high 3, FERS 40% or 44% if over 62). Alternative cash outs could be offered at 1% of hourly rate and would get massive acceptance. Sure some less committed (or less mathematically challenged) employees would still get the FERS Flu, but some CSRS do too.”
    Tom T.
  • “It appears that you wrote…about me! I am a FERS employee and plan to retire at the end of 2008 with 23 years of service with the IRS. Very seldom would I take a sick day and now find that I have over 1000 hours of sick leave and one year to work. What does the Government expect me to do? Lose that time or take off, I will probably do both.”
    J of the IRS
  • “The reason FERS employees take sick leave during their last 2 years of service prior to retirement is not because they don’t want to lose the sick leave, but because they want to maximize their annual leave balances immediately prior to retirement.”

    This is not rocket science.

    Any federal employee with at least half a brain maintains a running annual leave balance of 240 hours at the end of each leave year. They are also aware that if they take no annual leave during the year immediately prior to retirement, they will have accrued an additional 208 hours of A/L for a total of 448 hours. And if they retire at the optimum date for their category (usually 31 Dec for FERS, or 3 Jan for CSRS), they can cash the entire amount in as they go out the door.

    Under today’s 2008 draft presidential approved GS pay scale on this morning’s OPM salary Web page, a GS 12, step 10, in Los Angeles will earn $44.81 per hour next year.

    Multiply 448 hours by the hourly rate and the gross lump sum payment at the end of 2008 would be $20,074 (or approximately $14,453 after taxes — 26 percent tax rate). A GS 13/10 would equate to $23,869 gross or $17,185 net. Amounts will increase .05% more if Congress increases the Presidential approved 3% raise to 3.5%.

    End result — no one wants to take any annual leave during the last 2 years of service. Thus sick leave usage sky rockets.”
    Rob with Army

  • “I’m a CSRS retiree, retired in 2005. Oh . . . when FERS first came out, how was I able to just know that when the ‘apply to retirement’ benefit for sick leave was not included in FERS, that people would “use it or lose it?” What were the people thinking?”
    J.J. Dippel

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