Expert's View

In my last few columns I’ve focused on retirement, which is the topic du jour for most federal employees these days. That’s because there’s a lot of pressure on you to retire either voluntarily or involuntarily. In either case, you’ll need to be aware of the financial implications.

One thing you need to know is how to calculate your annuity. For most FERS employees, it’s simple:

* .01 x your high-3 x your years and full months of service (.011 if you have are age 60 and have at least 20 years of service)

For CSRS employees, the formula is more complicated:

* .015 x your high-3 x 5 years of service, plus

* .0175 x your high-3 x 5 years of service, plus

* .02 x your high-3 x all remaining years and full months of service

After you have met the age and service requirements to retire, CSRS employees get credit for all their unused sick leave. FERS employees will only get half credit for it if they retire before January 1, 2014. In either case unused sick leave can bump your annuity up another notch. How much? Well, that depends on how much you have, but you could easily add a number of months, if not several years, onto your creditable service if you’re a long-time employee who used sick leave only moderately. And remember, each year of credit adds 2 percentage points onto your annuity if under CSRS, 1 or 1.1 under FERS as described above.

Another thing you need to know is what will happen to your unused annual leave. You’ll receive a lump-sum payment for that leave. It will equal the pay you would have received in you had stayed on the employment roll until all that leave ran out.

To figure out how much you are due in that lump-sum payment, your agency will multiply your hours on unused annual leave by your hourly rate of pay, plus any other types of pay that you would have received while on annual leave.

Here’s what’s included when determining the value of your leave:

* Rate of basic pay

* Locality pay or other similar geographic adjustment

* Within-grade increase, but only if the waiting period was met on the day you separate

* Across-the-board annual adjustments

* Administratively uncontrollable overtime (AUO) pay, availability pay, and standby duty pay

* Night differentials for FWS employees only (including that portion of the lumps-um periods that would have occurred when you were scheduled to work night shifts

* Regularly scheduled overtime pay under the Fair Labor Standards Act, if you were on an uncommon tour of duty

* Supervisory differentials

* Nonforeign area cost of living allowances and post differentials

* Foreign area post allowances

Not included are allowances paid for such things as bonuses, allowances, overtime, holiday pay and certain differentials. The best way to determine if some form of pay is part of your basic pay is to compare what you are receiving in your paycheck with the amount that is being deducted from it for retirement contributions.

And, of course, you may be lucky enough to be offered a buyout to give you that extra incentive to retire. In many cases, that’s enough to tilt the scale. It certainly was for me!