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Annual Leave Payment Limitations for Retirees
Posted On: Dec 28, 2020

Annual Leave Payment Limitations for Retirees

December 24, 2020 

For APWU members planning on retiring at the end of the year, you may be affected by limitations to the annual leave carryover.

Due to the COVID-19 crisis, the APWU worked to negotiate various MOUs that would be beneficial to all of us during the pandemic. One of those MOUs was to increase the amount of leave that an employee could carry over into leave year 2021. This MOU allows for a maximum of 520 hours of earned annual leave to carry over into leave year 2021. If you have earned and banked more than 440 hours of annual leave and are planning on that leave being paid out to you as a terminal leave payment, you need to be aware of an issue that has been identified that will affect your annual leave payment.

Leave year 2020 concludes on January 1, 2020 and leave year 2021 begins on January 2, 2021. If you are a CSRS employee and retire on or before January 1, 2021 you can only be paid up to a maximum of 440 hours of annual leave. You would lose any earned annual leave over the 2020 leave year maximum of 440 hours. If you are CSRS and retire January 2 or 3, 2021 you will receive an earned annual leave payment up to 520 hours and an annuity payment for January 2021.

If you are a FERS employee, it is more complicated. You must retire on the last day of the month in order to receive an annuity payment for the following month. In this case, to receive a payment for January 2021 you must retire on December 31, 2020. However, you would lose any annual leave you have earned in excess of 440 hours. If you wait to retire on January 2, 2021, you would be paid earned annual leave up to 520 hours. But you would forfeit the right to an annuity payment for January 2021.

If you will not have more than 440 hours of annual on your currently scheduled retirement date you do not need to take any action unless you are a FERS employee with a January 1, 2021 retirement date and want to receive an annuity check for the month of January. To do so you must retire on December 31, 2020.

However, if you will have more than 440 hours of annual leave on your scheduled retirement date, you need to consider your options.

  • CSRS and FERS Option 1:  continue with retirement on December 31, 2020 with the understanding that you will not be paid for any earned annual leave over 440 hours but you will receive the January annuity payment.
  • CSRS Option 2: Change your retirement to January 2 or 3, 2021 to receive a payment for earned annual leave up to 520 hours and a January annuity payment.
  • FERS Option 2:  contact the USPS HRSSC and change your scheduled retirement date to date in the new leave year (any date on or after January 2, 2021). But you do so with the understanding that if you retire on any day in January 2021 you will not receive an annuity payment for January 2021, but you will receive payment for earned annual leave up to 520 hours.

“We want you to have the information you need to make an informed decision and make your transition into retirement a successful and joyous time,” said Industrial Relations Director Vance Zimmerman. “We urge you to cautiously consider how you choose to retire. Any questions should be directed to Charlie Cash in the Industrial Relations Department at 202-842-4273.”


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