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I distinctly remember a comment made by a college professor in a personal finance class I took during college. This professor had told our class how valuable his accrued leave was from the state benefits program. He was an older gentleman and must have worked for the state at this public university for 25+ years. During this time he had used very little of his leave time. Instead he took advantage of a perk the state employees that allowed him to build up unused leave time over the years. While I don't remember his specifics, I believe he was indicating to the class at the time he has accumulated over 6+ months worth of leave from his job when he retired. Quite a little perk if you ask me.
I was reading a newspaper article over the weekend that was highlighting the hidden costs of NC state worker's benefits such as leave accrual. The article indicated that NC offers compensation and retirement benefits that are much better than those offered in the private sector. Case in point, my employer does not allow any leave accrual. All unused leave (vacation, sick, etc) expires at the end of the calendar year if not used.
I find these leave accrual type systems interesting since I have never had the opportunity to participate in one. One the positive side, they offer employees a non-salary incentive that encourages them to stay with the employer (builds up over time) that the employer may not have to recognize the expense in the immediate year. Employees can build sometimes very sizable amounts of leave that give them added flexibility and security that is only a pipe-dream to someone like me who has no opportunity to build up leave like that.
However, they aren't something you can take with you so if your not going to stay in a job long they make work as a disadvantage. While my employer doesn't allow leave to accrue, its sick time is much more generous for brand new employees compared to places with leave accrual benefits. I am not sure which benefit system is best - clearly if you are going to work for the same employer for 30+ years I would much rather have the leave accrual, but I can't see myself working in the same organization for the next 20+ years. Even if I wanted to, things change; I doubt I would even have the opportunity to stay where I am at for that long.
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Comments (3)
I'm currently an NC state employee. I've worked in various sectors in my life (both private and public), and both have their advantages and disadvantages. As a state employee, we get a lot of leave time to be sure, but we don't get the same incentives as private business employees receive such as cash bonuses or raises above the rate of inflation. Plus, as a general rule, you're likely to get paid a good bit less doing government work than private work.
Posted by J | June 15, 2009 11:01 AM
I was paid for my unused vacation time that had accrued at my former state job when I left. It was only two weeks, but an extra pay check is still pretty cool
Posted by SavingDiva | June 16, 2009 12:45 PM
I didn't read the article, but I was wondering if it said the employer didn't have to realize the expense in the current year, or if that was your assumption. Just FYI, an "accrual" is short for "accrued expense." You credit the liability and debit expense, so it's recognized in the current year, even if it's just an estimate. Hope that clears up any confusion (I'm an accountant, btw).
Posted by Mike | June 20, 2009 9:15 PM