Sick Leave Saga

That may explain why FERS employees use substantially more sick leave than those in CSRS, the Congressional Research Service reported this summer and in 2004. One possible interpretation is that FERS employees calling in sick may not truly have the sniffles. But now, in an attempt to provide an incentive for FERS employees to allow sick leave to accumulate, Reps. James Moran, D-Va., and Frank Wolf, R-Va., are preparing legislation that would provide FERS retirees with a one-time payment, based on a formula that would take salary and total hours of sick leave into account. A spokesman for Moran said Tuesday that the lawmakers are drafting the legislation with plans to unveil it this month or in early December. Staffers are working with the Office of Personnel Management, management groups and federal labor unions to establish the optimal formula for figuring the cash payment. Jessica Klement, government affairs director for the Federal Managers Association -- one of the groups working with Moran on the draft -- said the potential formula still is undecided. But, she added, one potential option would pay 10 percent of the hourly rate of a retiree's high-three salary for any sick leave balance over 500 hours. Federal employees in both retirement systems receive 13 days of sick leave annually and may carry over unlimited amounts of leave from year to year. It's only in retirement that the differences between the two systems come to light. But Klement said the issue is hampering the federal workforce even before employees depart for retirement. She pointed to a CRS study that found that FERS employees eligible to retire used almost 35 percent more sick leave than their CSRS counterparts. FMA members, she said, also have expressed concerns that FERS employees tend to take more sick leave when they are nearing retirement. "To us, this is a management and productivity issue," Klement said. "If you're not in the office, you're not getting your work done. And if you're near retirement, it means you're not training the person who will take your place." The FERS sick leave issue also could have adverse implications for younger workers. With no incentive to conserve sick leave, for example, younger employees could use it liberally and be out of luck in the event of a major health problem, Klement said."No one plans on getting cancer or liver disease," Klement said, "and if that should unfortunately happen, employees will not have the sick leave needed to deal with the health problems." In April 2006, FMA and four other management groups formed a coalition, placing the FERS sick leave issue as one of its top agenda items. The coalition proposed a solution modeled on a New York state public employees program that places funds calculated from unused sick leave into an account to help pay health insurance premiums in retirement years. But Klement said the coalition scrapped the New York solution, largely because of its complexity and tax implications that would have required additional approval by the Ways and Means committees in the House and Senate. "We prefer the switch," Klement said. "The coalition has full support for any sort of credit for unused sick leave." Last week, the National Treasury Employees Union sent a letter to Moran and Wolf, expressing support for any legislation that could potentially correct the discrepancy between the two retirement systems. NTEU President Colleen Kelley questioned "the inequitable treatment of this unused sick leave for FERS employees who often work side-by-side with their CSRS colleagues." Both groups, Kelley said, "work diligently as dedicated public servants in agencies throughout the country, and both groups deserve to have their sick leave counted." The Thrift Savings Plan announced last week that the Internal Revenue Service contribution limit for all tax-exempt retirement plans in 2008 is $15,500. If you will be 50 or older during 2008, you also may contribute up to $5,000 in additional catch-up contributions if your regular contributions for the year reach the $15,500 ceiling.