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Proposed Bill Offers Up to $10,000 Cash-Out for . . .
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Proposed Bill Offers Up to $10,000 Cash-Out for Unused FERS Sick Leave At Retirement
Tuesday, March 11, 2008
A bill introduced Monday by Rep. James P. Moran Jr. (D-Va.) would allow
employees in the Federal Employees Retirement Service (FERS) to be compensated
for a portion of their unused sick leave in a lump sum of up to $10,000.
Currently, employees covered under the FERS system -- which was introduced in
1983, and now covers almost three-fourths of the current federal civilian
workforce -- have a "use-it-or-lose-it" requirement in their sick leave.
When FERS-covered employees retire, they receive no compensation for sick leave
they accumulate over their careers. Their counterparts, however, in
the older Civil Service Retirement System (CSRS) can convert unused sick leave
to credits to increase their retirement annuity.
Some feel the current FERS sick leave policy encourages employees to
abuse sick leave, by taking it as vacation time, particularly as they near
retirement.
Moran has argued the policy hurts productivity. The Office of Personnel
Management has estimated that the current varied sick leave policies between the
two retirement systems cost taxpayers $68 million each year.
Moran announced details of the bill at the 70th Annual Federal Managers
Association (FMA) Convention on Monday. "Federal managers know that
this issue is negatively affecting the workplace and that a solution must be
enacted. This legislation would encourage employees to responsibly use their
sick leave, and will ultimately save the taxpayers millions of dollars in gained
productivity," noted Darryl Perkinson, FMA national president.
Colleen M. Kelley, president of the National Treasury Employees Union
(NTEU), applauded the measure stating it is "a reasonable and welcome step to
correct some of the disparity in treatment for FERS retirees."
The propsed bill would compensate FERS-covered employees at
retirement for all unused sick leave in excess of 500 hours, paying them a lump
sum of up to $10,000 based on 15 percent of the value of that hourly sick
leave.
What does that look like in real numbers?
Here's an example...
Under the proposed bill, if a FERS-covered federal employee:
- has met the age and service eligibility requirements for retirement,
- earns $75,000 annually,
- and has accrued 1,250 sick leave hours at the time of retirement
this employee would receive about $4,000 as a lump sum payment at retirement.
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Overview - CSRS
