Federal Diary: Worries Over Sick Leave

By Joe Davidson
Wednesday, June 17, 2009

Please excuse Frankie and Flo Fed if they seem a bit standoffish when President Obama and congressional leaders congratulate themselves on Congress's approval of landmark tobacco legislation last week.

Obama probably will have a signing ceremony soon for the legislation that gives the Food and Drug Administration authority to regulate tobacco, restrict its advertising and ban toxins that make smoking deadly. Hopefully, the measure eventually will lead to a steep decline in smoking, particularly among children.

But for all the good the legislation can do, the absence of one amendment left federal employees looking as lonely as the nicotine junkies who gather outside office doorways because they are unwelcome inside.

For weeks, federal workers expected the bill to contain a provision to allow staff members covered by the Federal Employees Retirement System (FERS) to count unused sick leave in their retirement calculations. But when the overall bill won final approval, that measure had disappeared.

To be sure, other sections of the bill will please Frankie and Flo. Ironically, one of those employee provisions provides funding for the entire legislation and some of that money could have been used to cover the cost of the sick leave measure.

"We're very upset about that and would like to find some way to recover some of that [money] in future legislation, but I don't know if that's possible," said Randy Erwin, legislative director of the National Federation of Federal Employees.

Federal employees will provide significant funding for the overall tobacco bill by generating $2.3 billion over 10 years through an amendment creating a Roth investment option for federal workers. That would result in some employees contributing "after-tax income to their retirement plan rather than contributing pre-tax amounts, thereby boosting income tax revenues," a Congressional Budget Office report noted.

Under the final bill, new federal employees will be automatically enrolled in the government's Thrift Savings Plan, and their investments will get an immediate match from Uncle Sam.

All that's good, but it's the sick leave issue that's turning stomachs.

"I get calls every day from federal employees that are close to retirement but are putting it off until they know what will happen with the FERS sick leave issue," Erwin said. "They don't want to retire just before they would get some credit for their unused sick leave and miss out on it."

One of workers nearing retirement is Charles Ferreira, a 62-year-old employee at the Naval Undersea Warfare Center in Newport, R.I. "I'm a FERS employee with 32 years with the government, and I can go anytime," he said. "My sick leave goes down the toilet. I don't get that."

He has about 200 hours of unused sick time. "I don't have much, but there are people with thousands of hours who are going to lose it," he added.

Had Ferreira joined the government a little earlier, he would have been covered by the Civil Service Retirement System, which credits workers for unused sick time. If, for example, they retire after 30 years of federal employment with 1,000 hours of sick time, about six months' worth, they would get credit for about 30 1/2 years of service. That would increase the value of their annuity.

FERS workers get nothing for their unused sick leave, and that moves some people to use that time for, shall we say, mental health days.

"It encourages us to abuse the system," said William "Bud" Taylor, who, of course, admits to doing no such thing with his 600 hours.

The Army Corps of Engineers environmental engineer is on his second federal career, after having retired as a Navy commander. "People would be a lot more prudent with how they use their time" if they didn't think that they had to use it or lose it, he added.

"I don't think the public is aware that there is a system that incentivizes abuse. And it's only going to get worse."

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