Ask The Experts: Retirement

By Reg Jones

Using annual leave before retirement

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Q. I have the maximum hours of annual leave I can carry over: 240. Should I cash these hours in when I retire or use them, which would make my years of service a little longer and thus maybe make my retirement check a little larger?

A. You are assuming your employer would approve your using six weeks of leave before you retire. That’s not a safe assumption. The government’s civilian employees don’t have the right to take terminal leave.

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Terminal leave

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Q. I am leaving active duty with 20 years. I have 65 days of terminal leave. If I have been accepted to a federal job, can I start it while on active duty terminal leave?

A. Yes.

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Annual leave and retirement date

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Q. I work for a Veterans Affairs hospital under CSRS Offset. I was employed at the Postal Service from 1980 to 2001. I was reinstated at VA in 2008. I work Monday to Friday, 8 a.m. to 4:30 p.m. I am a GS-5. I have 178 hours of annual leave and 1,027 hours of sick leave. My service computation date is Feb. 12, 1987.

I am eligible to retire on my 60th birthday, which is March 28. I have planned a European vacation from March 21 to April 9. I want to take annual leave March 21-29. I have annual leave approved by my supervisor for March 21-31. (I used March 31 on my annual leave slip to coincide with my retirement date.)

The local human resources department is telling me that I must be physically at work on March 29 to use a retirement date of March 31, to clear the facility, that to be in an annual leave status on your retirement date is a violation of the terminal leave law at VA. Is this correct?

Can you please help me provide a reference that I am eligible to retire March 31 without being physically at work? They are saying the soonest I can retire is April 10 because that would be the soonest day that I could physically be at the facility after I am eligible to retire, due to being out of the country.

If I must be at work on my retirement date, could you suggest the least expensive date to retire?

A. Because the Office of Personnel Management’s leave regulations don’t address this one way or another, it’s been left to agencies to establish their own rules when it comes to granting requests for annual leave and determining whether an employee must be present on the day he or she retires or separates. Even then, there are exceptions — for example, if the retiring employee is too ill to come to work or when an activity is closed because of weather conditions.

Some agencies have more restrictive rules than others, probably a result of their response to earlier Comptroller General decisions that prohibited people from burning off their leave before retiring or separating (The Government Accountability Office calls this terminal leave). If your agency has such a rule governing the period before separation or a last-day rule, it should be in writing. Ask to see it.

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T-COLA and annual leave

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Q. I am a Postal Service craft employee in Hawaii planning to retire this year. We receive a 25 percent T-COLA on our base salary ($56,508) that also includes our annual leave as we use it, so our checks don’t shrink when on annual leave. Is the 25 percent T-COLA included on the terminal leave I wish to sell back at retirement?  If not, I will burn my annual leave before retiring.

A. Only if it is included in your basic pay and retirement deductions are taken from it. Note: You don’t have the option of “burning off” your annual leave before retirement. Requests for annual leave must be scheduled and approved by your supervisor.

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Leave usage

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Q. I plan on retiring in the near future. I will have around 300 hours on annual leave at that time.  Is there any Office of Personnel Management guidance that discusses my option to take the leave immediately prior to retirement rather than being paid for that leave at retirement?

A. There is no such thing as terminal leave in the federal civilian service. Therefore, you don’t have a choice. While you can take annual leave at such time and in such amounts as are approved by your supervisor, you can’t burn it off.  Just be happy that your unused annual leave will paid to you at the hourly basic pay rate you are receiving when you retire.

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Terminal leave

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Q. I am a FERS employee with 20 years’ service as of July 20. I plan to retire in 2013; however, I am not sure when I should go out. I will be 62 on June 20 and will reach my 21-year anniversary with the service July 20.

I plan to use all of my annual leave and go out on what is considered terminal leave, so depending on my retirement date, I could stop work in May and be on annual leave until my official retirement date.

Will it really make that much of a difference in retirement pay if I go out at the end of June or the end of July? I do plan on jumping on the Social Security bandwagon at 62.

I have 21 years of active-duty military service and have been collecting retirement from that since May 1992. I do not plan to have this put in the equation, as I do not want to give that up at all.

A. Nothing in federal civilian law or regulations permits an employee to take terminal leave. Therefore, your question about which approach makes better financial sense is moot.

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Annual and sick leave and retiring early

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Q. I just sent you a question and realized I did not include that I am under CSRS. As of Oct. 13, I had 29 years with the Postal Service  and presently have enough annual and sick leave to get me through until I have my required 30 years. What is the best way for me to retire early with the least amount of loss in my retirement?

A. First, I need to correct a misunderstanding on your part. You can’t use your annual and sick leave to help you reach 30 years of service. Unlike the military, the federal government doesn’t have a provision for terminal leave. You can only take annual leave if it’s approved by your supervisor. Sick leave may only be used for approved purposes and, if it extends over several days, it may require that you provide written evidence of your need to take it.

Second, the only way you could retire earlier than when you have the right combination of age and service, typically age 55 with 30 years, is if your agency was offering early retirements or separating you through reductions in force. Then you could retire at age 50 with 20 years of service or at any age with 25.

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FMLA leave and retirement

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Q. I have a little more than 300 hours of sick leave and have approved FMLA sick leave. I am eligible for retirement with 31 years of service and am 59. Can I use FMLA sick leave for three months consecutively and put in for retirement effective at the end of the three months?

A. Since the federal civilian government doesn’t have a provision for terminal leave, you’d have to have a legitimate reason for using the FMLA leave and you’d have to clear your retirement at the end of that period with your agency.

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Terminal leave or lump sum?

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Q. I am separating from civil service after 15 years. Is it more advantageous for me to take my leave as terminal leave or accept a lump-sum payment? (I have approximately 20 days).

A. There is no such thing as terminal leave in the federal civilian government. The decision of whether to approve a request to take annual leave before retirement is entirely up to your supervisor. If you end up having a choice between taking annual leave or receiving a lump-sum payment, you’ll have to figure out which would be more advantageous in your situation. One size does not fit all.

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Maximum leave paid at retirement

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Q. I am a Postal Service employee, Under CSRS, what is the maximum number of leave hours one can cash in at retirement: 240, 360 or more?

A. Bargaining unit employees can receive a terminal leave payment for their accumulated leave from the previous year (a maximum of 440 hours) and any accrued annual leave in the year they retire. Executive Administrative Schedule employees can receive a terminal leave payment for their accrued annual leave carried over from the previous year (a maximum of 560 hours) and any accrued annual leave earned during the year in which they retire.

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Negotiating payscale

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Q. I am active Army with a terminal leave date of July 1. I am considering a GS-13 position with a start date of July 1 (I plan to work during terminal leave), but I have to negotiate a step increase. However, I’m being told I can’t use my leave and earnings statement as justification for my current pay. Is that the case? If so, why?

A. Your leave and earnings statement is simply a one-month snapshot. In addition, it may be difficult for the folks you are negotiating with to separate the income that represents your job-based earnings from any allowances and differentials that don’t. You’ll need to ask them what they really need to have and then educate them.

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Military buyback and terminal leave

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Q. Like many prior-service members, I started my federal civilian job while on terminal leave. I started paying into FERS on my start date. There is a three-month overlap on my DD214 and my civilian position.

I would like to buy back my five years continuous active-duty time, but would like to NOT buy back the terminal leave period. Those three months add up to a five-figure chunk of change, and none of it is creditable since I cannot “double count” the time toward retirement. My agency states that I must pay back the entire period. Is that correct? And is there no exception to the FERS regulations to cover federal employees working on terminal leave? If not, it means I’m forced to double pay for time that can only be counted once.

A. Your agency is correct. It’s all or nothing.

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Retiring while on annual leave

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Q. I will be retiring from FERS on July 28. May I be on annual leave my last two pay periods, or must I actually work the last pay period of my federal service?

A. There is no requirement in law of regulation that you be on duty during the pay period in which you retire. At the same time, the federal civilian government doesn’t have a provision for terminal leave. Therefore, you’ll need to have supervisory approval to take any annual leave.

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Double dipping

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Q. I am an active-duty E-9 with a retirement date of July 1. With terminal leave and permissive temporary duty, I will be leaving the service in April. Am I eligible to start work in April if selected for a GS position? Are there any restrictions to going to work for a government contractor while on terminal leave?

A. Yes, you can go to work as a civilian government employee during your period of terminal leave. I don’t know if that’s true if you go to work for someone else. You’ll have to check with your personnel office.

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Using leave leading up to retirement

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Q: I will have approximately 372 hours of annual leave on the books prior to my Oct. 31 retirement date. Can I take all of my leave at once prior to my retirement date, or do I have to accept a lump-sum payment?

A: The civilian federal government doesn’t provide for terminal leave. You can only use your annual leave in that manner if it is appoved by your supervisor.

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Terminal leave

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Q. I have a friend who is 65 years old and has 15 years of service. He wants to retire and has requested to take his 300 hours of annual leave in the way of terminal leave. The organization is saying he must return on the last day of terminal leave to check out. We currently work in Europe and he would like to travel back to the U.S. and start his retirement without the requirement of returning. Is there a regulation I can read to get clarification on this?

A. First, there is no such thing as terminal leave in the federal civilian service. The granting of leave in any amount is in the hands of an employee’s supervisor. As for being at work on the last day of employment, according to OPM, there is no law or regulation requiring that an employee must be present at work on the day he retires. Therefore, the regular rules apply. If he doesn’t want to be at work on that day, he can, for example, ask his supervisor to approve annual leave or Leave Without Pay.

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