Federal Employees to Receive Retirement Credit

Included in the recent legislation that repealed the National Security Personnel System (NSPS) was a little noticed but extremely important provision extending credit for accrued sick leave to federal workers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. The change could mean a additional $350 per year in retirement income for a federal worker earning $70,000 and accumulating six months of sick leave.

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.

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