Many federal workers who plan to make their retirement date effective Jan. 1, 2000, will lose either part or all of the January annuity check due them.

Those Jan. 1 retirees will have failed to take advantage of a rare alignment of the regular calendar and the civil service leave year that combine to make Dec. 31 the day to depart.

Earlier this year, the Federal Diary pointed out the pros (there are no cons for most workers) of retiring Dec. 31 rather than Jan. 1. Since then we've had a steady stream of mail asking for details, proof or demands for a correction. Here's the deal:

Workers under the old Civil Service Retirement System (which covers most of feds eligible to retire) who leave on Jan. 1 (instead of Dec. 31, 1999) will lose one day out of their first retirement check (for January).

Workers under the newer Federal Employees Retirement System who retire effective Jan. 1, 2000 (instead of Dec. 31 of this year) will not get a federal annuity check for the month of January.

There is no advantage--and much to lose--for employees who pick Jan. 1 over Dec. 31 as their retirement date.

Since the first December vs. January column appeared here, dozens of workers have written to take issue. They say their personnel offices advise them to retire Jan. 1. Or they cite the fact that the leave year for most federal workers this year ends Jan. 1 (which is a Saturday). It is also the last day of the pay period for many employees.

Many workers are under the impression that their retirement must be effective the last day of the pay period and/or leave year so they can accrue another eight hours of annual leave. Unused annual leave can be cashed in--in the form of a lump-sum payment--when employees retire.

This year, according to benefits expert Tammy Flanagan (and Office of Personnel Management rules), Dec. 31 retirees will get the maximum January annuity benefit due them, plus a lump-sum leave pay bonus. Unused annual leave that they cash in will be paid them in the year 2000 and at the higher federal pay rate which should be in effect at that time. Federal employees are expected to get a pay raise averaging about 4.4 percent in January. Unused leave will be paid at the rate in effect when employees would have taken it--not the date of their retirement.

Flanagan works for the Rockville-based National Institute of Transition Planning. It conducts seminars on federal benefits--and retirement issues--for federal agencies. She says she's had lots of questions about the Dec. 31 vs. Jan. 1 retirement date at seminars. "This year is unique in that Dec. 31 is not only the end of the calendar year but also the leave year for most employees," she says. "While the leave year technically ends Jan. 1, employees who wish to retire the end of the year should list their effective retirement date as close of business Dec. 31 (unless they normally work on Saturday). This will allow them to accrue the final leave for pay period 26 as well as receive a lump-sum payment for all accumulated and accrued annual leave . . . which may include leave carried over from 1998 as well as leave earned and not used in 1999. The check will come in 2000 and will [or should be] be paid at the 2000 pay rate."

As backup, Flanagan cites an OPM regulation published in the Federal Register on July 8 [and 5 U.S.C.5551 and 5552]. OPM says the lump-sum annual leave payment must equal the pay the employee would have received had he or she remained employed until expiration of the period of annual leave.

Flanagan said that Dec. 31 retirees who are told they won't get lump-sum payment at the higher year 2000 pay rates should "write to the head of their agency, who has the responsibility for the proper administration of this regulation. This section of the Federal Register can be found at www.opm.gov/fedregis/index.htm."

To save yourself a post-retirement headache, it might be wise to get the issue settled with your agency personnel office well before you retire. Put the information in your "What a Difference a Day Makes" file.

Retirement, Insurance Update

At 9 a.m. tomorrow on WUST radio (1120 AM), Flanagan will discuss how to do a benefits checklist and guarantee health coverage for yourself and spouse in retirement. She'll also discuss, of course, the Dec. 31 retirement date.

NIH's Ombudsman

At 10 a.m. tomorrow on WUST radio, Doris Campos-Infantino will discuss how the ombudsman program works at the National Institutes of Health. Many federal agencies now have offices designed to handle complaints against (or questions about) the agency, its programs or personnel. NIH has one of the most active such programs in government.

Mike Causey's e-mail address is causeym@washpost.com

Friday, Sept. 10, 1999