GOVERNMENT AFFAIRS DIRECTOR KLEMENT ON FEDERAL NEWS RADIO DISCUSSING BILL THAT WOULD CREDIT FERS EMPLOYEES FOR SICK LEAVE UPON RETIREMENT - August 5, 2009

Federal Managers Association sees benefits to FERS flu cure

Jessica Klement, FMA's director of government affairs, spoke with Mike Causey on his Federal News Radio show, Your Turn. The discussion centered on a bill that would offer FERS employees an incentive to not take unnecessary sick days. Klement also discussed other issues of importance to FMA and what actions are being taken in regard to each.

Click here to listen to the interview.

Below is an accompanying Federal News Radio article on the interview with Director Klement.

By Dorothy Ramienski, FederalNewsRadio Internet Editor

There are a number of bills in the House and Senate that, if passed, could change the lives of many federal employees.

On Your Turn with Mike Causey, FederalNewsRadio's Senior Correspondent talked with Jessica Klement, legislative director of the Federal Managers Association.

One of the bills is attempting to cure the "FERS flu" -- a term relating to the fact that many federal employees under the Federal Employees Retirement System tend to take months off at the end of their careers because they can't cash in their sick leave when they retire.

Eight out of 10 federal employees fall under the FERS system.

This in comparison to the older system -- the Civil Service Retiree System (CSRS), which does give credit to employees when they retire.

Klement said the pending legislation, which is part of the House's Defense Authorization Bill (H.R. 2647), would alter the FERS system for the better.

"[It] would give FERS employees the same benefit their CSRS counterparts enjoy, which is all your sick leave is counted towards your total hours worked for the federal government to your years of service. So, one year of service is 2,080 hours, I believe, so if you have 2,000 hours of sick leave, you get an extra year added on to your years of service."

Klement said that evidence suggests that many feds retire with 2,000 or more hours of sick leave.

For CSRS employees, that translates to an annuity that is 2 percent larger. For FERS, it is 1 percent.

Some of the arguments against allowing FERS employees the same sick leave benefits as CSRS'ers have to do with the fact that the systems are different overall.

"It's almost like there are office fights. [CSRS employees say] -- 'The FERS have a different retirement system -- and that was the agreement at the time. You were given a better Thrift Savings Plan option, but the government gives you the equivalent of a 5 percent, tax-deferred pay raise in the matching contributions, which the CSRS people don't get'," Causey said, offering an anecdote from a recent email he received.

Klement said, this is true, but also noted that there are a lot of differences between CSRS and FERS employees and it is not always fair to directly compare the two.

"The reason this became part of the Federal Managers Association's agenda, in conjunction with several other management groups -- we formed an informal coalition called the Government Managers Coalition and tried to find a solution for this problem because all of us kept hearing from our members, 'My FERS employees who are nearing retirement keep calling in sick on a regular basis'."

Klement said she understands, as most managers do, that it is difficult to motivate FERS employees to not abuse a system when CSRS employees get something unavailable to those under FERS.

She added that, twenty years ago, when Congress and the President created the FERS system, the committee report on the bill said that a solution had to be found for the sick leave policy.

"The committee report . . . directed OPM to come up with something, because if you don't, people are going to abuse it. Prior to 1969, CSRS employees received no sick leave benefit, and half of them, prior to 1969, retired with a zero sick leave balance. The average was 40 days, but half of them retired with zero. So, Congress said to OPM, in 1986,. You nee to tell us how we can change this so people don't abuse their sick leave. Twenty years later, in 2006, OPM finally did a study taking a look at the problem. They determined that the loss of productivity is costing them $68 million."

Klement said that is $68 million per year, and she estimated that it will only get worse as more CSRS'ers leave the federal government.

"In 2014, 99 percent of federal employees will be under FERS. Right now, at $68 million a year, [that] is substantially more than the cost of extending the sick leave credit to FERS employees. So, while the score of the bill looks incredibly high, and it does -- this has been a hard sell for us because the score is high -- the cost of the problem is substantially more money."

To view this article in its original format, please visit FedNewsRadio at: http://www.federalnewsradio.com/index.php?nid=35&sid=1733506.