The 2013 leave year doesn’t end until Jan. 11, 2014, so if you are planning a retirement date and have accumulated annual leave and sick leave, you need to factor how you can make the most of your benefits.
If you retire before Jan. 1, 2014, you’ll only get half credit for your unused sick leave in the computation of your annuity. After Jan. 1, 2014, unused sick leave is credited at 100 percent to the employee at retirement. However, it has no cash value. Instead those hours are added to any actual service hours that weren’t used in the initial computation of an annuity. For every combination of hours that adds up to 174, an additional month will be added to the actual service time and increase the amount of the final annuity.
FERS annuity computation includes only whole years and whole months worked in calculating longevity service time. But unless you retire on an exact date completing a whole year or a whole month worked on the specific date of retirement you will be left with some workdays not credited for longevity service time purposes. All leftover days of actual service are added to any unused sick leave days and used in the computation of an annuity. However, because an annuity year is treated as if it was made up of 12 30-day months, those days have to be converted into months. To do that, 360 (12 x 30) is divided into 2,087 (the number of hours in a work year). Therefore, on average, a month equals 174 hours. Once the number of additional months is determined, all remaining hours are discarded.
If you retire before Jan. 1, 2014, you’ll only get half credit for your unused sick leave in the computation of your annuity.