How does unused sick leave count toward a FERS retirement?
FERS doesn't pay you cash for unused sick leave. Instead, for anyone retiring on an immediate annuity on or after January 1, 2014, 100% of your unused sick leave is added to your years of service when OPM computes your annuity. It is converted on a 2,087-hour work year, so about 174 hours equals one month. It raises the amount of your annuity, but it can't help you meet the age-and-service rules to retire.
The rule today
For most of FERS's history, unused sick leave counted for nothing. The National Defense Authorization Act for 2010 changed that in two steps (OPM: Benefits Administration Letter 10-101):
| Date you separate | Share of sick leave credited |
|---|---|
| October 28, 2009 to December 31, 2013 | 50% |
| January 1, 2014 and later | 100% |
OPM's FAQ confirms that unused sick leave is not paid out but is "factored into the annuity calculation" for an immediate retirement or a death in service, with 100% credit for FERS separations on or after January 1, 2014 (OPM: Will I get paid for unused sick leave?).
So anyone retiring under FERS today gets full credit. The leave simply has to be on the books on your last day, and your agency reports the balance to OPM with your retirement package.
What sick leave can't do
OPM's letter says sick leave is used in the annuity computation "but not for establishing title to an annuity or in the computation of average salary." In plain terms:
- It can't make you eligible. If you have 29 years and 8 months at your MRA, a big sick leave balance will not turn that into the 30 years you need for an unreduced MRA+30 retirement. OPM's chart booklet says it isn't used "to meet the minimum service requirement for retirement eligibility" (OPM: RI 83-8, sick leave chart).
- It doesn't change your high-3. Your high-3 average salary is based on pay you actually received.
- It isn't credited on a deferred annuity. BAL 10-101 applies the credit to people "separating with title to an immediate annuity" or who die in service leaving a survivor annuity. If you leave before you can retire and take a deferred annuity later, plan on no sick leave credit.
Whether sick leave counts toward the 20 years needed for the 1.1% multiplier at age 62 is a detail OPM's public pages don't spell out clearly. If you are close to 20 years at 62, ask your benefits office before you set a date.
How hours become service
OPM converts hours into years, months and days using a 2,087-hour work year, with 8 hours of sick leave counting as one day of credit for someone on a regular 8-hour schedule (OPM: RI 83-8). That works out to:
- 2,087 hours = 1 year
- About 174 hours = 1 month (2,087 ÷ 12)
- About 5.8 hours = 1 day of service in the chart
The sick leave days are then added to your actual service. Here is the part that surprises people: OPM uses only full years and months in the annuity formula. Any odd days left over after the sick leave is added are dropped. That means a few hours of sick leave can push you into one more month of credit, or a balance can fall just short and the extra days count for nothing.
The conversion chart
OPM publishes a full chart in its pamphlet RI 83-8. The table below shows the hours for each whole month. If your hours fall between two figures in OPM's full chart, OPM says to use the next higher figure.
| Sick leave hours | Credit |
|---|---|
| 174 | 1 month |
| 348 | 2 months |
| 522 | 3 months |
| 696 | 4 months |
| 870 | 5 months |
| 1,044 | 6 months |
| 1,217 | 7 months |
| 1,391 | 8 months |
| 1,565 | 9 months |
| 1,739 | 10 months |
| 1,913 | 11 months |
| 2,087 | 1 year |
Source: OPM: RI 83-8. Above 2,087 hours, subtract 2,087 for each full year and look up what's left. OPM's own examples: 441 hours is 2 months and 16 days, 835 hours is 4 months and 24 days, and 1,452 hours is 8 months and 11 days. The chart assumes your regular tour averages 8 hours a day. If yours doesn't, ask your payroll office.
Lee is a made-up FERS employee who retires at 60 with exactly 28 years and 4 months of service, a $90,000 high-3, and 1,300 hours of unused sick leave.
- Convert the hours. In OPM's full chart, 1,299 hours is 7 months and 14 days and 1,304 hours is 7 months and 15 days. 1,300 falls between, so Lee uses the higher figure: 7 months and 15 days.
- Add to service. 28 years, 4 months plus 7 months, 15 days = 28 years, 11 months, 15 days.
- Drop the odd days. Lee is credited with 28 years and 11 months, or 28.9167 years.
- Without sick leave: $90,000 × 1% × 28.3333 = $25,500 a year.
- With sick leave: $90,000 × 1% × 28.9167 = $26,025 a year.
- Result: about $525 more a year, paid every year for life and raised by future COLAs once they apply.
Lee's 28 years at 60 already qualify for the 60-with-20 retirement. If Lee had been 57 with 29 years and 6 months, those same hours could raise the annuity amount but could not make it an unreduced MRA+30 retirement.
Things that trip people up
- The value is modest but permanent. Each month of credit is worth 1/12 of 1% of your high-3 a year. On a $90,000 high-3 that's $75 a year per month of credit, for life.
- Timing your date. Because odd days are dropped, a retirement date a pay period later can sometimes add a month of service. Your benefits office can run both dates.
- Leave you use first doesn't count. Only the balance on your separation date is credited. The rules for when you can use sick leave are in your agency's policies and OPM's sick leave fact sheet.
- Transferred from CSRS. If part of your career was under CSRS, the sick leave rules for that part can differ. Ask OPM how your balance is split.
- Reemployed annuitants. Special rules apply if you retired, came back, and retire again. Ask your HR office.
What to do next
- Find your balance. It's on your leave and earnings statement.
- Convert it. Use the table above or OPM's full chart in RI 83-8.
- Ask for an estimate. Ask your agency's benefits office for an annuity estimate that includes sick leave, for your target date and one pay period later.
- Plan the rest. Our retirement checklist lists the steps from three years out.
Add your sick leave months to your service in our FERS planner to see the effect on your annuity.
Try the FERS plannerCommon questions
Does FERS pay out unused sick leave?
No. There is no cash payment. It is added to your service when OPM computes your annuity, at 100% for retirements on or after January 1, 2014.
How many sick leave hours equal a month of FERS service?
About 174 hours. OPM uses a 2,087-hour year, so 2,087 hours is one full year of credit.
Can sick leave help me reach 30 years for an MRA+30 retirement?
No. Sick leave is not used to establish eligibility to retire. It only increases the annuity once you qualify.
Does sick leave count for a deferred FERS annuity?
The credit applies to people who separate with title to an immediate annuity or die in service, so a deferred annuity generally gets no sick leave credit.
Does sick leave raise my high-3?
No. Your high-3 is based on basic pay actually received. Sick leave only adds to the service years in the formula.
What happens to leftover days?
After sick leave is added to your service, any days that don't make a full month are dropped from the annuity computation.
General information, not advice. We aren't part of OPM or your agency. Your agency's benefits office and OPM calculate your official service and annuity, including sick leave credit.