If you just made the leap into retirement, you are probably twiddling your thumbs waiting for the lump-sum payment you’ll be receiving from you agency for all that unused annual leave you had in your account when you jumped ship. And you are probably wondering how the amount will be calculated.
By law 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 January 6 will be paid at your 2006 hourly rate, while those after that date will be paid at the 2007 rate. If you are a CSRS employee who retired on January 3, only three days will be paid at the old hourly rate. In either case, talk about found money!
Despite the fact that the law requires that unused annual leave be treated this way, quite a few agencies failed to follow the law. That led to a recent court decision – the Archuleta Settlement – which has required them to correct their errors and cough up the amount they short-changed their former employees, with interest.
The good news for all of you new retirees is that federal agencies are now playing by the rules. So – keep your fingers crossed – you will get every penny you are entitled to.
One more thing. I started off with an image of you twiddling your thumbs waiting for your lump-sum payment to arrive, and you’re wondering when that will be. Although I can’t tell you exactly when, I can tell you that it will be shortly after the point that your agency closes out your employment record and cuts your final paycheck. In other words, it shouldn’t take too long. If it does, call your old agency and ask them to find out what’s holding things up.
