Retiring State Workers Converted Average of 43 Weeks Unused Sick Leave This Year

A MacIver News Service Investigation | October 14, 2011

State Employees who retired so far in 2011 have converted more than $300 million in unused sick leave to pay for post-retirement health insurance


[Madison, Wisc…] State employees who retired between January and September converted more than $340 million of unused sick leave, which they can use to purchase post-retirement health care, the MacIver News Service has learned.

For this investigation, MacIver examined data provided by the Wisconsin Department of Employee Trust Funds (ETF). Nearly 2,700 new retirees had an average of 1,716.65 sick hours banked, the equivalent of nearly 43 40-hour work weeks, each.

Wisconsin has two different programs for retiring state employees to convert their unused sick leave into health insurance payments.

Every state worker is enrolled in ASLCC (Accumulated Sick Leave Conversion Credit Program).  That program takes the number of unused sick hours an employee has and multiplies it by their highest basic hourly pay rate.

People who have worked for the state for over 15 years are also enrolled in SHICC (Supplemental Health Insurance Conversion Credit Program). This program takes the employee’s ASLCC amount and matches a certain portion of it.

For most State of Wisconsin employees, sick leave accrues at the rate of five hours every two weeks, to a maximum of 16.25 days a year. Unused sick leave hours accumulate from year to year and are converted at retirement to pay post-retirement health insurance premiums for the retiree and the eligible dependents. Sick leave credit conversion accounts have no cash value and do not accrue interest over time.

According to the ETF, the average cash value of unused sick leave under ASLCC for the 2,699 retirees who left state service between January 1 and September 25 is $97,779.93.

Extrapolating the ETF data (97,779.93 x 2,699) reveals the total value of unused sick leave converted by retirees through ASLCC for that period was $263,908,031.07.

There were 1,865 new retirees who qualified for the SHICC program ( through September 8 ) as well. Their average value of credits accrued in this supplemental program, according to the ETF, was $41,934.56. So, cumulatively, (1,865 x 41.934.56) the SHICC participants converted $78,207,954.40 worth of sick leave.

The combined value of the payouts from the two sick leave conversion credit programs available to state employees who retired so far this year is a staggering $342,115,985.47 according to an analysis of data provided by the state.

Upon a retiree’s death, surviving spouses and dependents are eligible to use credits from both programs.

Both sick leave conversion programs are pre-funded. State agencies pay ETF 1.2 percent of payroll as part of their fringe benefit rate based on what actuaries say is needed to fund the programs.

Proponents of public employee compensation reform have repeatedly pointed to the difference between how the public and private sectors award fringe benefits to their employees. The new revelations underscore those differences.

Coming next: Reaction from legislators, others.

  • vic

    The federal employees also have a similar policy. Unlike the private sector Fed employees get to carry over there sick leave. At retirement some employees have a years worth of sick leave which they then can either burn or apply to time earned for their retirement. For each year of time earned you get an increase of 2 percent in money on the old retirement system.

  • Don Israel

    This largesse needs to end. Private sector employees sick leave starts fresh every year. Why do we allow this and other glorification of government employees? Start their sick leave over at each new year and no banking. And no payment for \”unused sick leave\” that just encourages fraud. Okay, so they didn\’t get sick. So what? We don\’t either, but we don\’t whine about not getting paid extra not to get sick. Or are government employees simply not as healthy, or as productive as those in the private sector? Maybe these government employees have opened up a whole new can of worms for Governor Walker to investigate and put an end to? Sure hope so.

  • John

    The plight of private sector employees is a tragedy so how about this institute starting some investigations on the private corporations and how they totally screw their workers. Most workers public and private are dedicated hardworking people and neighbors. Why focus on the public sector all of the time? So what, we all pay taxes, get rid of all gov\’t employees and agencies and guess what?–we will still all pay taxes. We would be paying for private services and the employees would continue to get royally screwed-not to mention the services would most likely deteriorate. It appears that the Maclver Institute wants to focus on one part of the problem. There is nothing wrong with the benefits that public employees earn-but there is something drastically wrong with how private sector employees are treated like dogs. How about it macliver? lets see some investigative journalism.

  • Charyl Zehfus

    Many public employers, such as cities, are eliminating banked sick leave right now. However, banking and converting sick leave has been legal for public workers for some time, and I don\’t think it is fair to blame them for using the benefit.

    \”Wisconsin has two different programs for retiring state employees to convert their unused sick leave into health insurance payments.\”

    Hey, maybe public workers should have no paid sick leave at all like entry level private sector workers who pay taxes to employ them. Would that make the vitriol towards public workers end?

  • Jennifer

    What is the deal with always comparing public to private. All jobs are not created equals, there are perks to every job, if you dont like the perk of one, take the other one and stop complaining MY GOD!

  • Jude

    It\’s so like Fitzgerald to complain about what state workers are getting when he receives the exact same benefit.

  • We in the public sector are dissatisfied mainly because we are the ones paying for this benefit. Government people seem to think we can foot the bill for everything they want. The public is going broke. The gov. is already broke. They keep printing monopoly money. Wheres the money going to come from.? Timothy Geithner, he doesn\”t pay taxes as it is.Gov.doyle,? he skipped town…

  • Fred Kolb

    A benefit that costs 1.2% of payroll, is highly valued by employees, and gets converted to health insurance is a brilliant use of fringe benefit dollars. Highly valued and low cost. This is what benefits are all about.

  • Janet

    Let\’s just beat everyone down…make the playing field even. Remove every scrap of employee benefit from every sector on the grid so no one can point another out and whine that someone else gets more than the other. Don\’t promote one type of employer that raises the bar for everyone. Makes me sad that everyone is constantly fighting. Employers really do treat their workers like dogs, or worse.

  • George

    It is good that the public finally learns about this inequity, among the rest of them.
    We need to stop stealing from our children\’s future standard of living, I am constantly apologizing to our children for the way greedy individuals have manipulated their government for personal gain at my kid\’s expense.

  • Debby

    I don\’t know where you get your information but you are sadly mistaken if you think public employees are paid more and get more benefits than private sector. Not one taxpayer dollar goes to support my retirement or my sick leave. We received the sick days because we have not had a pay raise in years. I make $13.05 an hour. I pay over $300.00 a month for my health and dental insurance. Walker wanted us to pay more for our retirement? We pay all of it already. The state pays nothing to our retirement. Fooled you didn\’t he. Lets get the facts straight and people like you that seem to be jealous that you can\’t pass a state test to get employement need to shut up until you educate yourself. If you are going to speak at least know your facts. Public employees sacrifice to save those days year after year. It is part of the benefit package we negotiated. Do you only work 40-50 hours a week. Thank the unions for that benefit. Do you have safe working conditions? thank the unions for that. Do get time and a half after 40? Thank unions for that. Some of you people are so blind by your ignorance. Walk in to a state prison. Put your life on the line every day like Prison guards do. Do it I dare you. No, you are a coward and just want to sit back and complain. If they did make more and have more benefits don\’t they deserve that for what they have to endure every day? Sure every industry has slackers but I guarantee you a person that works in a jail, prision or detention center does not slack off. Just walking through the door is a risk they take for who? You idiot.

  • David

    The neat thing about this is go ahead and remove it and the state workers will continue to leave. Only to be replaced by contracted workers that cost more! Knee jerk reactions to inflammatory remarks and finding a scapegoat is exactly what dictators rely on….