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Washington, D.C., July 30th – Congressman Jim Moran, Northern Virginia Democrat, announced today that his legislation (H.R. 5573) providing federal employees under the FERS retirement system with a sick leave benefit at retirement was approved by the House today, as a part of legislation to regulate tobacco products (H.R. 1108).
“Our current use-it or lose-it system sick leave system for FERS employees hurts productivity and increases training costs,” said Moran. “We need to be incentivizing the accrual of sick leave, not encouraging people to call in sick in the weeks leading up to retirement. With today’s passage, we’re putting FERS employees on par with their CSRS colleagues, replacing a flawed approach to sick leave with one proven to work in everybody’s favor.”
The FERS retirement system, created by Congress in 1986, does not include a sick leave benefit. For these civil servants, unused sick leave at retirement is lost if not used. However, federal employees under the old CSRS retirement system (those who joined the civil service prior to 1968) are currently able to convert unused sick leave at retirement into an increase in their annual annuity.
This has not always been the case. In 1969, Congress added a sick leave benefit for CSRS employees after data showed that the use of sick leave went up dramatically nearing the time of retirement. The Civil Service Commission – the forerunner to OPM – estimated that half of all retiring federal employees had ZERO sick leave; their reports showed that retiring employees prior to 1969 used an average of 40 sick leave days in their last year of employment.
“Congress ignored the lessons learned under CSRS and history is repeating itself,” Moran added. “Our federal workforce is the best in the world; they deserve a benefit designed to reward, not punish, those who play by the rules.”
A Congressional Research Service report from August 2007, found that sick leave balances are lower for FERS employees than CSRS employees. Independent studies by the Bureau of Prisons have reached the same conclusion with OPM confirming it in their own analysis. OPM estimates that this flawed policy is costing taxpayers $68 million per year.
In a recent survey of FERS and CSRS employees, 85% of CSRS employees said they conserved as much sick leave as possible. On the other hand, 75% of FERS employees said they would use as much sick leave as possible during their last years.
Highlights of the benefit:
• To comply with pay-go rules, the sick leave benefit originally introduced by Moran was modified to reduce costs.
• The new incentive will provide FERS employees the same sick leave benefit employees under the CSRS retirement system currently enjoy.
• At retirement, unused sick leave will count towards FERS federal employees’ retirement annuity.
• For the first three years after enactment of the new law, employees would receive an addition to their annuity up to 75 percent of their unused sick leave days. After that three year window, 100 percent of retiring federal employees’ sick leave days would go towards their annuity.
• Covers ALL federal employees included in the FERS system, and will include those covered under the Foreign Service Pension System, and United States Postal Service.
Example of how the benefit will work:
• For a GS 12, Step 10 making roughly $75,000 retires with 20 years of service and 2,600 hours of sick leave (approximately one year) the new incentive would increase their annuity by over $600 per year, from $15,000 to $15,625.
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