If you’ve just retired, unused annual leave is projected forward as if you were still on the job. That’s a financially important fact for those who retire just before an annual pay increase takes effect.

For example, in you are a FERS employee who retired on December 31, those hours of unused annual leave that would carry you up through the end of the 2009 leave year (January 2) will be paid at your 2009 hourly rate, while hours after that date will be paid at the 2010 rate. If you are a CSRS employee who retired on January 3, only three days will be paid at the old hourly rate.

Despite the fact that the law requires that unused annual leave be treated this way, quite a few agencies traditionally failed to follow the law. That led to a court decision – the Archuleta Settlement – which required them to correct their errors and cough up the amount they short-changed their former employees, with interest. That settlement fund is now closed, but it’s worth being aware that agencies have and still can make mistakes on this policy.