Expert's View

Many of you are thinking hard about retiring soon, in some cases to avoid the turmoil that comes with a change of administration. And this time the turmoil will be even greater. If you are one of those, your decision may be influenced by how much unused annual leave you’ll be paid for when you retire. Well, the amount depends on who your employer is. Let me explain.

Non-Postal Service Employees


Most employees can accumulate and carry-over a maximum of 240 hours of annual leave into the next leave year. If you are an overseas employees, you can accumulate and carry over a maximum of 360 hours. And, if you are an SESer, you can carry over a maximum of 720 hours, unless you have a personal annual leave base that is higher.

However, you can receive a larger lump sum payment than those carry-over limits if you 1) entered the current year with the maximum number of annual leave hours, 2) earned additional hours during the current year, and retire no later than January 7, 2017, which is the end of the 2016 leave year. If you do that, you’ll receive a lump-sum payment for that original amount plus any annual leave hours you have accumulated over the course of this year.

Postal Service Employees

If you are a member of the Postal Career Executive Service (PCES), you can receive a lump-sum payment for an unlimited amount of unused annual leave. If you are under the Executive and Administrative Scale (EAS), which includes supervisors, managers, postmasters and other non-bargaining unit employees, you can receive a lump-sum payment for a maximum of 560 plus any earned and unused annual leave accumulated during the year in which you retire. So, if you entered the leave year with 560 hours and took no leave during it, you could receive a payment for 768 hours. If you are a Clerk and Letter Carrier covered by union contracts with such organizations as APWU and NALC, you are limited to a maximum lump-sum payment for 440 hours.

How the Lump-sum Payment is Figured

When calculating a lump-sum payment, your agency will project those unused hours of annual leave forward as if you were still an employee. The amount will be figured on what you would have received had you remained on the agency’s rolls. Included in that amount will be such things as basic pay, locality pay, special pay and non-foreign area cost-of-living adjustments, and any pay raise (other than a step increase) to which you would have been entitled had you still been on the job.