Use It and Abuse It

The sick-leave problem is not new. In the 1960s, about half of CSRS employees retired with zero sick-leave balances because of a use-it-or-lose-it rule. On average, retiring employees used 40 days of sick leave in their last year of employment.

To reduce the use of sick leave, Congress in 1969 decided to permit CSRS employees to receive credit for unused sick leave when their pensions were calculated.

For example, a 30-year employee earning $50,000 in salary who converted his sick leave to obtain credit for 31 years of service would increase his pretax pension by about $1,000 a year, according to the Congressional Research Service report.

To pay for that policy change, Congress increased the amount employees and their agencies pay into the civil service retirement trust fund.

Why Congress did not permit FERS employees to get retirement credit for unused sick leave is unclear, but such a benefit is costly and the sponsors of FERS wanted to create a system that would make it easier for employees to come and go. As CSRS employees retire, leaving a greater percentage of FERS employees in the federal system every year, agencies are studying the impact of the shift.

A review by the Office of Personnel Management, for example, found use of sick leave increased by more than 10 percent between 1994 and 2001. A study at the federal Bureau of Prisons found FERS that employees in that agency used more sick leave than those in CSRS, even with controlling for other possible factors, from 1994 through 2003.

And a CRS analysis of payroll data on nearly 500,000 employees showed that FERS employees eligible to retire used nearly 35 percent more sick leave than comparable CSRS employees.

In hopes of creating an incentive for FERS employees to keep their sick leave rather than use it up, Rep. James P. Moran Jr. (D-Va.) is drafting a bill that would provide a retiring worker with a one-time payment, based on a formula that would take into account salary and hours of sick leave accrued.

Moran's staff plans to work with the OPM, manager associations and unions to come up with a formula that saves the government money while providing an incentive for FERS employees to retain sick leave. Rep. Frank R. Wolf (R-Va.) plans to partner with Moran on finding a solution, aides said.

Moran would like to have a bill ready by late November, an aide said.