Who would have thought that you could still accrue time toward your federal employee retirement benefits while in nonpay status and without having to adjust your service computation date? Well, it turns out that you can.
Various Service Computation Dates
As we discussed in a previous article, there is no one-size-fits-all Service Computation Date (SCD) for your Federal Government benefits.
The following all have their own SCD:
- Leave accrual
- Career tenure
- In-grade pay increases
- Retirement eligibility
- Retirement annuity
- Retention position during a reduction in force
- TSP vesting
But depending on which benefit you look at, a certain amount of time in nonpay status is allowed without having any effect on that date.
In these cases, your creditable service will continue to grow. But it’s important to know just how much time in nonpay status you can have for each benefit before it begins to take a toll on your SCD.
Types of Nonpay Status
There are several types of nonpay status including:
- Leave without Pay
- Absent-uniformed Service
- Seasonal Employee
Even though they are used for different purposes, they all affect your SCD for each benefit in the same way.
The only factors you need to focus on are the number of days in nonpay status and the particular benefit in question.
Examples of Nonpay Status Affecting Federal Benefits
As a new Federal Employee, you start off under a probationary period, typically six months.
During this time, you can be in nonpay status for up to 22 days before it affects your probationary period. For each day after 22 days in nonpay status, your probationary period is extended by one day.
You can have 30 days of nonpay status before your SCD for career tenure is affected.
You are allowed up to six months of nonpay status before your SCD for retirement eligibility will be adjusted.
Like retirement eligibility, your leave accrual rate advancement (i.e. six hour to eight hour increase in accrual rate) will be unaffected if you are in nonpay status for six months or less. However, while in nonpay status you will not accrue paid time off or sick leave.
FEGLI and FEHB
Your FEGLI and FEHB coverage will continue for a full year in nonpay status. However, you will incur a debt upon your return for your share of the premiums that were not paid.
What To Do?
If you find yourself in nonpay status, don’t be shocked to find that while one category of benefits may be affected by a certain length of time in this status another may not.
In addition, you should make sure HR correctly adjusts or doesn’t adjust your SCDs for each particular federal employee retirement benefit.
If you want to know more about your options and financial planning as a federal employee, we’d love to speak with you! Get started with our Free Retirement Readiness eBook: A Guide for Federal Employees.
For over 30 years, federal employee retirement planning has been a key focus of Medallion Financial Group. We recognize that FERS retirement benefits have extra layers of complexity, such as the Thrift Savings Plan (TSP), 401K, Pension plan, FEGLI and more. It’s easy to get lost in a sea of bad advice when so few people understand the basics. We help with the basics and beyond to enable our clients to get the education and advice they need to retire with confidence.
Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.
We strive to exceed client expectations – because we have high expectations of ourselves.