Expert's View

I know we’re only in July and there are months to go before most eligible employees get serious about retirement. However, there are always some who make plans to stop work well ahead of their actual retirement by burning off accumulated annual leave.

Let me save you some effort; you can’t do that. In short, taking terminal leave is based on a mistaken belief that civilian employees have the same entitlement to use annual leave that is granted to the armed forces.

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Military rules
Before members of the military are separated or retire, they are permitted to burn off their unused leave. So, for example, a service member due to be separated on September 30 who have 30 days of accrued leave could go on “terminal leave” on September 1.

While they’ll still get their military pay and any other entitlements, they are essentially already out of the service. One of the advantages of this arrangement is that it gives members of the military who are not separating for retirement time to look for (or prepare for, if they’ve already found) employment, while they are still in pay status.

Civilian rules
There is no such thing as terminal leave in the civilian federal government. That matter was settled by the Comptroller General of the United States as far back as January 1945. In decision B-46683, 24 Comp. Gen 511, he stated that “terminal annual or vacation leave may not be granted immediately prior to separation from the service in any case where it is known in advance that the employee is to be separated from the service.”

In short, you just can’t burn it off. Annual leave needs to be scheduled and approved by your supervisor. While this might seem like an unfair restriction, just remember that you’ll be compensated for any unused annual leave you have to your credit on the day you retire; it will be paid in a lump-sum at the hourly rate of basic pay you were receiving during your final pay period. And if you retire around the turn of the year, as many federal employees do, that rate will be increased by any pay raise taking effect during an equivalent time from your retirement date.

Still, there’s a little wiggle room for taking leave. You can, with the approval of your boss, take a few days off before you retire. However, for your boss to approve it, the amount you request needs to be reasonable. While there is no law or regulation that requires you to be at work on the day you retire, it’s clear from the Comptroller General’s decision that you and your boss should use discretion to avoid the appearance that you are taking terminal leave, which, as spelled out above, is forbidden.

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