BNUMBER:  B-271561.2
DATE:  July 26, 1996
TITLE:  Voluntary Leave Transfer Program-Disability Retirement

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Matter of:Voluntary Leave Transfer Program-Disability Retirement

File:     B-271561.2

Date:July 26, 1996

DIGEST

Where an employee has been in a leave status for over a year due to a 
serious illness from which he is not expected to recover sufficiently 
to return to duty, the agency should take steps to initiate disability 
retirement for him rather than allow him to remain on the roles on 
annual leave to use up the 10,000 hours of leave transferred to him 
under the Voluntary Leave Transfer Program.  The program was not 
established as a substitute for disability retirement.  Upon approval 
of disability retirement or upon separation, the remaining unused 
transferred leave must be returned to the donors, and it may not be 
credited toward the employee's time in service for retirement 
purposes.

DECISION

This action is in response to a request from the Inspector General of 
the Department of Transportation for an opinion concerning the 
application of the leave transfer program and the disability 
retirement program in the case of an employee of the Inspector 
General's Office who suffered a serious illness and has been in sick 
and annual leave statuses since May 1995, and who is not expected to 
recover sufficiently to return to duty.  

Background

The Inspector General states that in October 1995, the employee's 
participation in the leave transfer program was approved based on a 
medical certification from his physician citing the employee's 
significant improvement and the need to provide him with as much 
opportunity as possible to recover.  Since then, over 10,000 hours of 
annual leave have been donated to him.  The Inspector General reports 
that this would be more than sufficient to allow the employee, a 
criminal investigator, to remain on annual leave until he reaches 
retirement eligibility as a law enforcement officer in October 1999, 
and there is an expectation on the part of the employee and his spouse 
that he will be permitted to remain in leave status up to that date 
and beyond.  

The Inspector General states that the employee's current condition is 
such that he is unable to perform the duties of his position and he is 
not expected to improve sufficiently to allow him to return to duty in 
the future.  The Inspector General further states that to permit the 
employee to remain in such a leave status for the contemplated period 
would create a hardship for the agency since the employee's position 
could not be filled and he could not contribute to the mission of the 
agency.  Our opinion is therefore requested on several questions 
concerning whether, in these circumstances, the voluntary leave 
transfer program regulations permit the agency to terminate the 
employee's medical emergency status, which allows him to continue to 
receive and use donated leave under the program, and initiate 
disability retirement for him. 

The Inspector General notes that the regulations provide no guidance 
with respect to the duration of a medical emergency under the leave 
transfer program, particularly as to whether an employee in the 
described circumstances remains in such an emergency status although 
over a year has passed since the initial onset of  the disabling 
illness.  The Inspector General therefore asks us to determine whether 
the employee's situation no longer constitutes a medical emergency 
under the program, and if we determine that it no longer constitutes 
such an emergency, she asks--    

       1.  is the agency required, under the regulations and based on 
the impact to its operations, to initiate disability retirement for 
the employee even though the agency has received leave donations 
sufficient to keep the employee in a leave status until the date of 
his retirement eligibility and beyond, and

     2.  may the employee immediately claim all of the donated leave 
in a lump sum and apply the leave toward his time in service for 
retirement purposes?

Analysis and Conclusions

Pursuant to 5 U.S.C.  sec.  6332, the Office of Personnel Management (OPM) 
has established the Voluntary Leave Transfer Program, as provided for 
by  5 U.S.C.  sec.  6331-6340, to allow employees to transfer unused 
accrued annual leave to another employee who needs such leave because 
of a medical emergency.  See OPM's implementing regulations in 5 
C.F.R. Part 630, Subpart I. 

The legislative history of Public Law 100-566, 102 Stat. 2834 (1988), 
which initially enacted 5 U.S.C.  sec.  6331-6340, indicates that Congress 
recognized that federal employees have no short-term disability 
coverage as such and must rely on sick leave for short-term illnesses 
and the disability provisions of the federal retirement systems for 
long-term illnesses.  Congress intended the leave transfer program to 
close the gap in such coverage.  See S. Rep. No. 100-437, 100th Cong. 
3 (1988), reprinted in 1988 U.S.C.C.A.N. 3688.  The legislative 
history also states that the program "was not meant to be a substitute 
for disability retirement, and agencies should encourage employees to 
apply for disability retirement if circumstances warrant it," and that 
"once the application [for disability retirement] has been approved, 
the leave recipient may not receive or use additional transferred 
leave and the personal emergency is considered terminated."  S. Rep. 
No. 100-437, supra, 7, 1988 U.S.C.C.A.N. 3693.

In accordance with the statutory provisions, the  regulations define 
"medical emergency" to mean:

     "a medical condition of an employee or a family member of such 
     employee that is likely to require an employee's absence from 
     duty for a prolonged period of time and to result in a 
     substantial loss of income to the employee because of the 
     unavailability of paid leave" 5 C.F.R.  sec.  630.903 (1995), 
     implementing 5 U.S.C.  sec.  6331(4).

The termination of a medical emergency is governed by 5 C.F.R.  sec.  
630.910, implementing 5 U.S.C.  sec.  6335.  Section 630.910(a) provides 
several circumstances under which a medical emergency shall terminate, 
including as is pertinent to this case, when the leave recipient's 
federal service is terminated, or at the end of the biweekly pay 
period in which the leave recipient's employing agency receives notice 
that OPM has approved an application for disability retirement for the 
leave recipient under the Civil Service Retirement System or the 
Federal Employees' Retirement System.  The regulation also provides 
that the employing agency shall continuously monitor the status of the 
medical emergency affecting the leave recipient to ensure that the 
leave recipient continues to be affected by a medical emergency.  5 
C.F.R.  sec.  630.910(b).  

In addition, 5 C.F.R.  sec.  630.910(c) provides that when a medical 
emergency terminates, no further requests for transfer of annual leave 
to the leave recipient may granted, and any unused transferred leave 
remaining to the credit of the leave recipient shall be restored to 
the leave donors under 5 C.F.R.  sec.  630.911.  This provision implements 
5 U.S.C.  sec.  6335(b), which provides that the employing agency shall, 
consistent with guidelines prescribed by OPM, establish procedures to 
ensure that a leave recipient "is not permitted to use or receive any 
transferred leave" after the medical emergency terminates.  See also, 
Mary Dawson, 70 Comp. Gen. 432 (1991).

In response to the Inspector General's first question, while 
apparently the employee continues to be in a "medical emergency" 
status as defined in the statute and regulation cited above, it is our 
view that the law and regulations do not require the agency to retain 
the employee indefinitely on its roles in a leave status merely 
because a large amount of leave has been donated to him and he prefers 
to remain in that status.  In fact, to do so, rather than initiate 
disability retirement procedures, would appear contrary to the purpose 
of the program as expressed in the legislative history referred to 
above.  The regulations clearly contemplate that the agency should 
monitor the employee's condition.  When it appears that it is unlikely 
that he will recover sufficiently to resume his duties, particularly 
when he has been unable to work for such a long period, as in this 
case, the employee should be encouraged to apply for disability 
retirement and he should be provided assistance in doing so.  As is 
noted above, upon the agency's receipt of notice that OPM has approved 
the disability retirement application or upon the employee's 
separation, the medical emergency terminates.  5 C.F.R.  sec.  630.910(a), 
supra.  

We note that both the Federal Employees' Retirement System and the 
Civil Service Retirement System provide for disability retirement for 
individuals who have become disabled because of a medical condition 
resulting in a service deficiency in performance, conduct, or 
attendance, and whose disabling medical condition is expected to last 
at least a year from the date the application for disability 
retirement is filed.  5 C.F.R.  sec.  831.1203 and 844.103.  The 
regulations also provide for the agency to file a disability 
retirement application on behalf of an employee in certain 
circumstances.  5 C.F.R.  sec.  831.1205 and 844.202.  However, the 
administration of these retirement systems are under the jurisdiction 
of OPM, and we suggest therefore that the Inspector General consult 
with OPM regarding the appropriate steps to take in this case to 
initiate disability retirement for the employee.

In response to the second question, whether the employee may apply the 
unused transferred annual leave in a lump sum toward his time in 
service for retirement purposes, we know of no authority for crediting 
annual leave for such a purpose.[1]  
In any event, as is noted above, upon termination of the medical 
emergency, any unused transferred annual leave remaining to the credit 
of the leave recipient must be restored to the leave donors, as 
provided by 5 C.F.R.  sec.  630.910(c) and 630.911.  Therefore, this 
question is answered in the negative.

/s/Seymour Efros
for Robert P. Murphy
General Counsel

1. The determinations of creditable service for retirement under the 
Civil Service Retirement System and the Federal Employees' Retirement 
System are matters within the jurisdiction of OPM.  5 C.F.R.  sec.  
831.101 and 841.105.  While provision is made for crediting unused 
sick leave in the computation of annuities under the Civil Service 
Retirement System (5 C.F.R.  sec.  831.302), no provision is made for 
crediting unused annual leave under either system.  5 C.F.R. Part 831, 
Subpart C, and Part 842, Subpart C.