Reg Jones Expert's View

Yeah, I know. Many of you who were going to retire in 2006 have already done so. But I’m still getting questions from those of you who haven’t, about how much annual leave you can be paid for when you do retire. So let me prepare you with the answers for when you do jump ship. To do this, I’m going to have to divide the material into two parts, one dealing with Postal Service employees, the other with the rest of you.

Postal Service Employees

In 1971 the Post Office Department transformed into the U.S. Postal Service. As a quasi-independent organization within the federal government, it was given broader authority to set pay and certain benefits. For that reason, the amount of unused annual which its employees may carry into retirement depends on the category in which they fall.

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 during the year in which you retire. In other words, if you entered that calendar year with 560 hours and took no leave during it, you could receive a payment for 768 hours. If you are a clerk or letter carrier covered by union contracts with such organizations as APWU and NALC, you can receive a maximum lump-sum payment for 440 hours.

Non-Postal Service Employees

At one time, members of the Senior Executive Service (SES) were allowed to receive a lump-sum payment for an unlimited amount of unused annual leave. Now the ceiling is lower: 720 hours, unless you had more than that amount to your credit when the law changed. In that case, this became your personal base.

With one small exception, the rest of the non-postal workforce falls into a single category. If you are employed within the U.S. or any of its territories and possessions, you may accumulate and carry-over a maximum of 240 hours of annual leave into the next leave year. Overseas employees may accumulate and carry over a maximum of 360 hours.

All leave years begin on the first day of the first pay period in a calendar year. In 2006 the leave year began on January 8, 2006 for most agencies. In 2007 it begins on January 7. What this means in practical terms, is that you could enter 2006 with a maximum number of hours (240 or 360) and, if you retire before January 7, 2007, receive a lump-sum payment for that amount plus any unused annual leave hours you accumulated over the course of the year.

In some cases it may even be possible to receive a lump-sum payment for more than that if your agency either restores or allows you to carry over more hours than usual. That can happen if you had scheduled such leave at the end of the year but illness prevented you from taking it or your agency was forced to cancel your leave to meet its needs. How long you will be able to hold on to that restored leave will depend on the time limits your agency sets for its use.

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 on the rolls. The amount will be figured on what you would have received. Included in that amount will be such things as basic pay, locality pay, non-foreign area COLAs, and any pay raises to which you would have been entitled.