by George Ray

This post was originally published on October 15, 2013 at federalbenefitsadvocates.com

Here’s something important to remember for those who may be looking to retire by the end of 2013. FERS employees who retire on or before December 31, 2013 will receive only 50% credit for their unused sick leave toward the calculation of their retirement annuity. But FERS employees who retire on January 1, 2014 will receive 100% credit for their FERS unused sick leave.

The National Defense Authorization Act of 2009 changed the way that unused sick leave is credited for retirement calculation purposes under the Federal Employees Retirement System (FERS). Since we are approaching the deadline for the change in the use of FERS Unused Leave for retirement calculation purposes, we thought it would be important to remind financial advisers about this change.

The regulation says that for employees covered by the Federal Employees Retirement System (FERS), credit toward the annuity computation will be based upon a percentage of the sick leave balance at retirement (or death), depending on the date the entitlement to the annuity begins:

· 50% in the case of an annuity entitlement based on a separation from service from October 28, 2009, through December 31, 2013; and

· 100% in the case of an annuity entitlement based on a separation from service occurring on or after January 1, 2014

As a result of this regulation, we expect to see a large number of FERS employees who may have been expecting to retire at the end of the year, waiting until January 2014 to put in their paperwork. It will certainly make sense for most FERS employees. And, the Office of Personnel Management (OPM) is likely expecting to receive more applications than it typically receives in January.