Boost Your Pension with Unused Sick Leave

Before 2009, Federal Employees Retirement System (FERS) workers lost their accrued sick leave annually, resulting in a rush to use up days before they vanished. This led to a surge of absentees near year-end, straining government operations.

President Obama ushered in a pivotal change with a new law. Until December 31, 2013, retiring employees could count up to 50% of their unused sick leave towards their pension calculation. From January 1, 2014, this policy expanded, allowing 100% of unused sick leave to bolster a FERS retiree’s monthly pension.

The Value of Unused Sick Leave

While unused sick leave isn’t considered for immediate annuity eligibility under FERS, it enhances the annuity once eligibility criteria are met.

Calculating Unused Sick Leave

For retirement calculations, each sick leave day is approximated at 5.8 hours. Using 2,087 hours per work year, divided by 360 for monthly calculations, full-time workers accrue 13 days (104 hours) annually.

Under FERS, each year of unused sick leave boosts the annuity by 1%, with a 1.1% increase for those eligible for the FERS Bonus upon retirement at age 62 or later. (Note: Civil Service Retirement System (CSRS) retirees receive a 2% increase for each year of unused sick leave.)

Unused Sick Leave upon Separation

If leaving federal employment before retirement eligibility, unused sick leave isn’t considered in the pension calculation. However, if rejoining the federal government, these hours are reinstated and contribute to future benefit calculations.