Ask The Experts: Retirement

By Reg Jones

High-3

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Q. I started at a federal agency in June 2010 as a GS-14. I bought back my military time (10 years).  I was recalled to active duty in the Army in March 2011. I was on active duty, and in a leave-without-pay status, until March 2012. I returned to my agency after completing my service. I may take a GS-12 position closer to home. I’m close to retirement age. If I switch to GS-12 in July, would my high-3 be a mix of GS-14 and GS-12? If I switch to GS-12 in January 2015, would my high-3 be as a GS-14?

A. Your high-3 will be your highest three consecutive years (36 months) of average basic pay, no matter when they occur in your career.

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Paid and nonpaid leave

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Q. In considering leave without pay unrelated to the Family and Medical Leave Act or military duty, is there a requirement that annual and sick leave must be exhausted before granting LWOP? The following from 5 CFR doesn’t completely address this: If an employee has exhausted his or her available annual or sick leave or other forms of paid time off, he or she may request leave without pay. LWOP is a temporary nonpay status and absence from duty that, in most cases, is granted at the employee’s request.

A. Leave without pay is a temporary nonpay status and an authorized absence from duty, usually issued when the employee has insufficient annual leave or sick leave, or compensatory time available to cover an approved absence. However, an employee does not have to exhaust annual or sick leave before requesting LWOP.

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Leave without pay and high-3

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Q. When doing an online search about leave without pay during the high-3 years for annuity calculation, I found the FedExperts response from Nov. 30, 2012. It stated that less than six months LWOP per calendar year does not count against time in service, nor does it reduce one’s salary calculation for the high-3 years.

However, on my CSRS Personal Benefits Statements for 2011 and 2012, it appears that it does reduce the retirement annuity.

In September/October 2011, I took 79 hours of LWOP. My Jan. 2, 2011, CSRS PBS shows a high-three of $110,657, and an annuity of $6,982 a month. My Jan. 1, 2012, CSRS PBS shows a high-3 of $113,372, and an annuity of $6,964 a month. How is it that my high-3 went up in 2012 but my annuity dropped by $18 a month?

A. I should have said that it rarely has any effect on a high-3. That’s because it is the average of an employee’s highest three consecutive years of average basic pay. Since there haven’t been any across-the-board pay increases in the past few years, the only time that a high-3 could be affected would be if an employee had a within-grade increase or a promotion. To see how the high-3 computation is done, go to www.opm.gov/retire/pubs/handbook/C050.pdf and scroll down to Section 50A2.1-4A

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Leave without pay and creditable service

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Q. I ran out of sick leave after cancer treatment in 2008-09. I had two months leave without pay in 2008 and three months LWOP in 2009. Will this time be deducted from my total years of service when I retire this year?

A. No, they won’t.

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Leave without pay

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Q. Under the Family Medical Leave Act, an employee can be granted up to 12 weeks or 480 hours of leave without pay. I understand that LWOP of up to six months counts as creditable service for the service computation date. Anything over six months requires an adjustment. Is there a maximum number of hours that constitutes six months under the FMLA?

If you take LWOP several days a pay period, and not consecutively, how do you determine the LWOP time?

A. For the full story on LWOP and its affect on benefits, go to www.opm.gov/oca/leave/html/LWOP_eff.asp.

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Leave without pay

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Q. I am a military spouse. My spouse received official orders for a permanent change of station outside our state.

I submitted a request for leave without pay due to my spouse’s official orders.

My organization at the time, the Defense Logistics Agency, did not grant me LWOP but instead submitted an SF-52 stating that the member “resigned no reason given.”

I sent several messages to the local human resources office about the error.

The response from the HR office was that LWOP would not be granted because the organization could not afford to have my old position vacant for any time.

Can the Defense Logistics Agency deny LWOP due to spouse official orders? The characterization of my SF-50 caused me to have a break in federal service. This was the third time I have used the LWOP with the Army and Air Force without any problem.

A: Yes, an agency can refuse to grant an employee’s request to take leave without pay if, for example, it would interfere with a unit’s ability to efficiently carry out its mission. The fact that the employee’s spouse has official orders to relocate doesn’t alter the agency’s right to do so.

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High-3 calculation and leave without pay

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Q. I am a Postal Service employee under CSRS. I am planning on taking the incentive and retiring Jan. 31, which will give a total of 34 years and nine months of service including sick leave. I have used approximately 3,700 hours of leave without pay over my entire career with the maximum used in one year being 408.46 hours and the minimum being zero.

1. It is my understanding that any LWOP used during that time, as long as it does not exceed six months in any year, will not affect my length of service used to determine my retirement annuity. Am I correct?

2. My base pay for the past three years — 2010, 2011, 2012 — is the same: $53,102. During each of these years, I have used some LWOP time: 178.51 hours for 2010, 71.8 hours for 2011, and 115 hours for 2012. Will the dollar amount used for my high-3 be my base pay of $53,102 for those three years, or will my base pay amount be reduced by the amount of LWOP I have used in each of those years. For example, will my base pay for 2012 be reduced by 115 hours of LWOP times my hourly rate for a total of approximately $3,000? Or will my base pay of $53,102 be used?

A. Being on leave without pay for less that six months in a calendar year won’t affect your years of service, nor will it affect the high-3 used in the computation of your annuity.

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Leave without pay

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Q. I am retiring Jan. 31. I am out on medical leave. Can I use leave without pay for two months so I won’t have to return to work prior to retiring?

A. That’s entirely up to your agency. You’ll need to discuss the matter with your supervisor.

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Sick leave vs. LWOP for unexpected surgery

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Q. I am a federal civilian worker with a recent injury outside of the workplace. I do not have sufficient sick leave to cover my upcoming surgery and convalescence. I have annual leave but would prefer not to completely deplete my leave . Am I required to use all of my leave, or can I take some leave without pay? If I do not have enough paid leave to cover the time, am I a risk for dismissal from my post?

A. Discuss the matter with your supervisor and your personnel office. You may be eligible for advanced sick leave, the leave transfer program or the emergency leave transfer program. While you aren’t required to use your annual leave when your sick leave runs out, it is up to your agency to decide if you can be placed in leave without pay.

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Nonretained and leave without pay

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Q. I am a dual status employee working for the Air National Guard in SC. If I am nonretained in the military, I know I will lose my full-time job. Knowing this will happen, after the nonretained military paperwork is submitted, can I take leave without pay and start another job in the private workforce? Basically, I want to secure a job before my last day on the full-time side (after the nonretained paperwork has been approved). When can this be done? I was told it may take “awhile” for the paperwork to come back from the full time side and I don’t want to miss out on any opportunity that may come up before they tell me when my last official full-time day is.

A. Whether you would be granted LWOP would be entirely up to your agency. All you can do is ask.

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FERS leave without pay and retirement computation date

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Q. I have worked for the USPS for a little more than 25 years and am under FERS. I have accumulated 2903 hours of LWOP over this period (having two babies and caring for elderly parents). I never used more than six months in any one year. Will I have to make this time up on the end (approximately 1½ years)? Will it affect my retirement computation date?

A. Up to six months of LWOP in a calendar year is considered creditable service. As a result, your retirement computation date won’t be affected.

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Leave without pay

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Q. Would you please explain the differences between using leave without pay and leave without pay-uniformed services and how it impacts someone at retirement? Am I automatically placed on LWOP-US when activated for Reserve training (title 32), or can I request LWOP and not have to make a deposit? I have been making deposits for a lot of LWOP-US over my career and would hate to find out I didn’t have to make those payments for stints less than six months.

A. No, you don’t have a choice. When called to active duty, you are automatically placed on LWOP-US unless you elect to use annual leave for some or all of that time.

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Leave without pay, military time and retirement contributions

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Q. I am a GS employee that is also a member of the Air Guard. I will be leaving on leave without pay to go through military training for roughly five to six months. How will this affect my FERS retirement and my Thrift Savings Plan contributions? Do I have to buy back my military retirement to obtain my FERS retirement contributions during my LWOP?

A. Reg Jones: You will be on LWOP-US. Therefore, you will have to make a deposit to the retirement system to get credit for that period of active-duty service.

Mike Miles: You may not contribute to the TSP while in LWOP status.

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High-3 and Leave Without Pay

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Q. The high-3 method for computing an annuity under FERS requires computing the three consecutive highest-earning years for computing the annuity payments. What effect does Leave Without Pay have on this? In other words, if you had four months of LWOP during one of the high-3 years, is the base pay used in the computation or are the actual earnings (accounting for the LWOP) used?

A. As long as you don’t exceed six months of LWOP in a calendar year, your high-3 will be calculated on your base pay, not on the pay you actually received.

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Leave without pay and high-3

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Q. This question concerns the computation for an annuity under FERS. The high-3 method requires computing the three consecutive highest-earning years for computing the annuity payments. What effect does leave without pay (LWOP) have on that method? If you had four months of leave without pay during one of the high-3 years, is the base pay used in the computation or are the actual earnings (accounting for the leave) used in the computation?

A. Because you had fewer than six months of leave without pay, your base pay will be used, not your actual earnings.

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Leave without pay, part-time service and annuity computation

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Q. I’m a fed with 25 years of service. I’m 53 years old. Unfortunately, I’m having a lot of health issues. While I may be able to qualify for retirement disability, I prefer to try and hang on as long as I can in my job. Fortunately, I have a sympathetic employer that has allowed me to be off of work. I’ve lost all of my 2,000 hours of leave. If I take leave without pay or use the Family Leave Act, is there a minimum number of hours I must work to earn a year of service? If there is a minimum, how does that affect my medical benefits? Do I only have ¾ benefits if I work a lower number of hours? Do I only have ½ benefits if I work an even lower number of hours?

The way I look at this is, if I’m able to work at least 16 hours per week, which is equivalent to 40 percent of my pay or what I would earn in Year 2 and later of retirement disability, I may as well continue to try and work.

Retiring now, losing 45 percent (9 x 5%) of my 25 years is not a great option, either.

A. You can find out how your annuity would be computed if you have any part-time service, go to www.opm.gov/retire/pubs/handbook/C055.pdf and scroll down to Part 55B2. As for health benefits, you can continue your enrollment and receive the same benefits. However, your contributions to pay for that coverage will be greater because you agency will only pay for the percentage that is equal to your work schedule. For example, if you worked half time, your agency would only pay half of its share of the premiums. You would be required to pay the other half plus your own share.

Whether you take leave without pay on its own or under the Family and Medical Leave Act, any such period that is less than six months in a calendar year will be treated as actual service. No credit will be given for any period that exceeds six months in a calendar year.

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Workers’ comp

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Q. I am part of CSRS. I was hired into federal service in 1979. In 1982, I was injured on the job and on workers’ compensation for seven years. A few recent retirees have told me they were notified by the Office of Personnel Management of outstanding indebtedness going back over 25 years due to nonpayment of retirement money. When I retire, will I be required to pay OPM for those seven years of retirement money I did not pay into the system while I was on workers’ comp? Or is my retirement annuity based on what I paid into the system?

A. According to OPM, “An employee who is in a leave-without-pay (LWOP) status while in receipt of FECA benefits will receive full credit for the LWOP period in the computation of annuity and for high-3 average salary purposes. LWOP while in receipt of FECA benefits is not subject to the limitation of 6 months credit in each calendar year, as is other LWOP.” See www.opm.gov/retire/pubs/handbook/C0102.pdf.

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Leave without pay and involuntary recall

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Q. I am on active duty under Title 10 for a 225-day involuntary recall deployment. I am also a 15-year federal employee. Upon coming into the federal position in 2003, I bought back my four years of active-duty time, which has been applied to my FERS position. I would now like to have the deployment days added onto my federal career. I am on leave without pay. However, I am receiving differential of pay. Would I be authorized to have the deployment time calculated to my federal position? I was also informed that I would receive no evaluation or SF-50 while out of my federal position. Therefore, would a military evaluation be allowed in my federal service record for future job reference? How is leave without pay applied if I am applying for other federal jobs?

A. Because you are on LWOP-US, when you return to your civilian job, you can make a deposit to get credit for that time. While your military evaluation might be of interest to a future employer, it would only carry weight if your military assignment was in the same field and at the same level of the job for which you were applying.

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High-3 and leave without pay

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Q. Is the retirement high-3 average affected by taking less than six months leave without pay during the high-3 basic pay years?

A. No.

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LWOP vs. annual and sick leave

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Q. I’m a carrier for the Postal Service. Due to recent health issues, I have had to use a lot of leave without pay. How many hours of annual leave do I lose for using LWOP?

A. To find out the effect on annual and sick leave of being on leave without pay, go to www.opm.gov/oca/leave/html/LWOP_eff.asp and scroll down to “Accrual of annual and sick leave.”

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