Every employee treats their sick leave differently. Some employees battle through colds and stomach issues, determined not to miss a day. Other employees use every sick day possible, wanting to take advantage of the time off — even if they just have a light sniffle. FERS employees may want to consider additional information before deciding what to do with their sick leave.
While you’re free to do whatever you want with your sick leave, it might help to base your decisions off of how your unused sick leave is credited in your retirement. Sick leave credits vary between CSRS and FERS employees, and there are strict guidelines on who will get credited and when.
You should always take the necessary time you need when you’re sick to get back on your feet. However, if you have unused sick time, you might see a small bump in your savings when you retire.
Who Gets Credit for Unpaid Sick Leave?
Not everyone is credited for their unused sick leave. It is only available to candidates who meet the age and time requirements in the federal government. If you leave the government before you are eligible to retire, then you do not qualify for the sick time credit. However, if you do return to the government, those unused hours remain credited on your account.
Sick leave also can’t be used to make you eligible to retire. You need to qualify for retirement on your own before you can use any sick leave credit.
A Day of Sick Leave Isn’t Eight Hours
While the news of who qualifies for sick leave credits may frustrate some candidates, there is good news. The Office of Personnel Management doesn’t consider eight hours a full day. For sick leave, only 5.8 hours are needed to consider it a full day.
The 5.8 day number comes from the OPM taking the number of work hours per year (2,087) and dividing it by 360. For retirement purposes, every month has 30 days, so 30 days times 12 months is 360.
So if you only missed a half-day because you went home early, or you only docked an hour or two at a time for a dentist appointment or other health-related concerns, you may have more sick days than you realize.
If you have 500 unused sick hours, you actually have about 86 days of unused sick time (using a 5.8 hour day) instead of the standard 63 you would have in an eight-hour day.
Any hours after the last full month are discarded. These days are then converted into additional months worked in the annuity calculation.
How Do Unused Sick Months Affect the Annuities of CSRS and FERS Employees?
While the calculation of unused sick months is universal regardless of your employee status or retirement plan, the annuity calculations vary depending on your retirement structure.
- CSRS employees will receive an annuity increase of 1/6 of 1% for every month of unused sick leave.
- FERS employees will receive an annuity increase of 1/12 of 1% for every month of unused sick leave.
- FERS employees who retire at the age of 62 or later with at least 20 years of service will receive an increase of 1/12 of 1.1%
Essentially, FERS employees need 12 months of sick credit to increase annuities payments by 1%. CSRS employees need half that time.FERS employees need 12 months of sick credit to increase annuities payments by 1%. CSRS employees need half that time.Click To Tweet
What About FERS Employees with a CSRS Savings Component?
Not all employees have black and white retirement plans. In fact, many federal workers switched to FERS from CSRS over the years, leaving their retirement savings split between two accounts.
If this is the case for you, your sick leave hours that you accrued under a CSRS will transfer to your CSRS account, while the remaining hours will move to your FERS account. For example, if you have 500 sick hours and earned 200 of them when you had a CSRS, then the remaining 300 hours will accrue at a FERS rate.
There will likely be some lost hours because of this transition. For example, the OPM will round the 200 hours mentioned earlier to the nearest month, and then cast out the extra days. Then, they will follow the same process for the remaining 300. Understanding these factors can help you calculate your expected lost hours and mixed FERS and CSRS annuities.
Learn How Your Sick Leave Affects Your Annuities
If you’re still uncertain about how much sick leave you have, whether you qualify for a sick leave credit when you retire, and even how much of an annuity increase you can expect, contact MyFEDBenefits today.
The specialists at MyFEDBenefits understand the nuances of retirement benefits and how they are calculated by the federal government. We can review your sick leave hours and retirement plan to see what kind of bump in your annuities you can expect when you retire.
Start by filling out a free benefits workbook or contacting one of our local specialists. These steps will give you the tools to understand whether you’re ready for retirement and how you can live comfortably after you leave federal service.