OPM IG Releases Study On USPS OIG’s Proposals to Change USPS Funding of Retiree Benefits
Filed under: fehb, oig, opm, postal, postal news, press releases, usps
Press Release from the OPM Office Of Inspector General
Study of the Risks and Consequences of the USPS OIG’s Proposals to Change USPS’s Funding of Retiree Benefits: Shifting Costs from USPS Ratepayers to Taxpayers’
Washington, DC – (Feb. 28, 2011) Today, the U.S. Office of Personnel Management (OPM), Office of the Inspector General (OPM OIG), issued a study analyzing certain proposals issued by the United States Postal Service (USPS), Office of Inspector General (USPS OIG), regarding changes in the manner by which the USPS funds both its retiree annuity and health benefit obligations. The OPM OIG paper, A Study of the Risks and Consequences of the USPS OIG’s Proposals to Change USPS’s Funding of Retiree Benefits: Shifting Costs from USPS Ratepayers to Taxpayers, reviews the impact that the proposals would have upon the trust funds and the Federal benefit programs administered by OPM.
In a series of reports containing these proposals, the USPS OIG has estimated that the USPS has “overpaid” these trust funds by as much as $142 billion. The proposals generally envision changing the law governing the manner in which the USPS’s retiree benefit liabilities are determined and funded.
“We felt that the issues surrounding the USPS OIG’s proposals had not been fully explored,” said Inspector General Patrick E. McFarland. “It was important for us to examine not only the effects that the proposals would have upon the USPS, but also their impact upon the Federal retirement system as a whole. We were also concerned that there was a public perception that OPM may have inappropriately calculated the USPS’s liabilities. In fact, our analysis revealed that OPM has fully complied with the law.”
The OPM OIG study also concludes that generally the proposals would have a lasting negative effect upon the retirement programs and trust funds and have little, if any, positive impact upon the USPS’s ultimate long-term profitability. In addition, the result of these proposals would be to shift costs from USPS ratepayers to the American taxpayers.
While the USPS’s financial situation must be addressed, the OPM OIG study cautions against using the Federal retirement program as a vehicle through which to implement policy objectives unrelated to the Federal retiree benefit programs. “The resolution of the USPS’s financial situation should be fully transparent rather than providing an indirect subsidy from the Federal benefits system,” said Inspector General McFarland.
“While our findings do not support the USPS OIG’s proposals,” stated Inspector General McFarland, “we think that our work, combined with theirs, will help the Congress, the Administration, and the USPS to develop the most efficient and effective resolution of the USPS’s current problems.”
Here’s an interesting little tidbit from the report:
Under the FEHB Program, a portion of a retiree’s health care insurance premium is paid for by the Federal Government (or, in the case of USPS retirees, the USPS) through contributions to the Employees Health Benefits (EHB) Fund.The Federal or USPS retiree contributes the remaining amount of the premium to the fund.
As the USPS OIG’s reports have repeatedly pointed out, the Federal Government does not prefund it s retiree health obligations. Instead, the employer and employee contributions pay only for the costs of the program for that particular year. Consequently, the EHB Fund maintains only a small amount of reserves and thus does not have significant assets that remain in the fund from year to year.
It is unclear, however, what the effect would be upon USPS employees’ or retirees’ rights if the USPS ceased making its required payments into the EHB Fund because the fund does not contain sufficient reserves that could be used to “replace” the USPS’s contributions. Consequently, the fund’s assets would be exhausted very quickly.
In such a scenario, the insurance companies would still be legally entitled to the full amount of the premium negotiated under the contract. The OPM would have to take some sort of action because without the USPS’s contributions, the fund simply would not have enough money to pay every FEHB Program participant’s premium.
Absent an emergency appropriation from Congress, it is possible that the OPM would have to exercise its regulatory authority to disenroll USPS employees and retirees as a class in order to continue providing health care coverage to all other FEHB Program participants.
USPS’s Financial Outlook
While various parties have worked diligently to develop business and operational initiatives geared towards improving the USPS’s business model and financial condition, we have yet see a report that contain s viable projections that it will improve its financial situation.
OPM OIG Study of USPS OIG Proposals Feb 28 2011
Postal Worker Fired For Excessive Use Of Military Leave Wins Partial Court Victory…AGAIN!
Sidenote: Richard Erickson has “served in the military for over two decades, during which time he achieved the highest rank possible for a non-commissioned officer [Sergeant Major], and was awarded the Silver Star and the Army Commendation Medal for Valor.” source: Erickson v. U.S. Postal Service, MSPB Docket No. AT-3443-07-0016-I-2 (Initial Decision, Sept. 26, 2007).
Richard Erickson, a distribution Clerk was removed from his position at Fort Myers Processing and Distribution Center (Fort Myers, Florida). Erickson filed an MSPB appeal under Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), asserting that he was improperly removed because of his military service and requesting that he be reinstated. The MSPB administrative judge (AJ) found that USPS violated USERRA by removing Erickson from his position but nevertheless denied him any relief. The AJ’s decision was based on the determination that Erickson subsequently waived his reemployment rights under USERRA by abandoning his civilian employment in favor of a military career. MSPB denied Erickson’s appeal TWICE and the Court of Appeals has remanded this case back to MSPB TWICE. Read on…. Read more
OMB Director Will Not Testify At House Subcommittee Hearing On USPS Woes
The Honorable Jacob J. Lew, Director, Office of Management and Budget according to the press release was invited to testify at the “Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy hearing on March 2, 2011. The hearing titled “Pushing the Envelope: The Looming Crisis at USPS” will examine the fiscal situation of the Postal Service and potential areas for postal reform. Congressman Dennis Ross (R-Fl) is chairman.” But Congressman Dennis Ross (R-FL) tweeted that OMB is refusing to testify at the Postal Service hearing this Wednesday. see press release . It appears Congressman Ross is having too much fun pulling the chain of his distractors.
” RepDennisRoss
OMB refusing to testify at our Oversight Hearing this Wed. on the looming financial crisis in the postal service. http://bit.ly/ep0fx3 “
The tweet makes reference to the Daily Caller article which uses the term “bailout” in its headline.
read more from Courier, Express, and Postal Observer
APWU Members To Protest At White House Regarding Protection of USPS on March 7th
Regarding the Protection of the United States Postal Service
WE have a Permit for Monday March 7th from 1:30PM -3:30 PM to demonstrate our concerns: “Regarding the Protection of the United States Postal Service.”
We are to be at the Center Portion of the White House Sidewalk at said time.
Please show your concern and SHOW UP!
We will be bringing informational leaflets, Posters and OUR Passion!
For further information, please contact APWU Members:
Joe Shevlin -JOE0986@comcast.net or Michael Levine -shaman100@gmail.com
Mission Statement:
A protest on March 7th 2011 at the White House ‘Regarding the Protection of the United States Postal Service’ organized by active and retired APWU rank and file membership. The demonstration primarily focuses on a permanent solution and payback to/of the CSRS and FERS pension overfunding to save postal worker jobs rather than the temporary ‘relief’ measures proposed by the Obama administration’s budget plans allowing further dismantling of the postal service. The union members demonstrating will also stand in solidarity and support of our brothers and sisters in the current assault on collective bargaining rights that initiated in Wisconsin. The APWU National Executive Board and Presidents’ Conference delegates (who will be in DC at time of protest) are all invited along with the entire rank and file membership.
download APWU Protest Flyer
IN SOLIDARITY
Editorial: Not all post offices should pay their way
Filed under: APWU, fedex, post office closings, postal, postal news, ups, usps
In an editorial by the Concord (New Hampshire) Monitor they wrote:
The postal service has since the 1980s operated as an “independent establishment of the executive branch” and, as such, is expected to be self-supporting. For the most part, it is. But in exchange for its monopoly on first and third-class mail, it is charged with providing universal service, which means delivering mail at a loss in many parts of the nation.
Some 26,000 of the service’s post offices operate at a loss. The service has embarked on a long and cumbersome review of 2,000 of those offices to decide how many to close. By law, it is not allowed to close offices solely because they are losing money. Doing so in some cases makes sense. In other cases – for example, when the nearest alternative post office would be many miles away – a money-losing office shouldn’t be closed.
Some conservatives want to end the postal service’s monopoly and let private companies deliver rural mail. Rural residents, of course, would be charged rates commensurate with the cost of delivery. A move in that direction, however, would be a tragic break with history and a breach of the social contract, one that would be economically and sociologically devastating to much of rural America. Read full article
Not so fast! At a meeting last year the Postal Service briefed APWU National officers about plans to consolidate operations in large stations and branches. USPS conceded that:
…among the reasons for closing stations and branches is that there are fewer “procedural requirements” for closing stations and branches than for small post offices. They also said that 34 percent (now 35%) of current postal revenue comes through alternative access, and that they are striving to increase that percentage.
The reasons given by USPS on what Triggers a station/branch to close or consolidate:
Operational Efficiencies
Declining Office Workload
- Retail Transactions
- Mail Volume
Proximity of Other Facilities
Loss of Lease; No Suitable Alternate Quarters
Economic Savings Offered through Alternative Service
So is it closing money-losing stations/branches, a way to increase alternative access to postal services or both?
APWU expressed its concern that USPS may be attempting to circumvent the contract:
We also believe that if management backfills the stations and branches it closes with contract postal offices (CPUs), this would violate the procedural requirements on subcontracting in Article 32.1 of the Collective Bargaining Agreement.
The other point to ponder: In many of the locations where stations/branches are closing or consolidating sits FedEx Kinkos and UPS stores. So USPS customers may choose to utilize alternative companies in lieu of traveling the extra distance for USPS alternative access to mail services. Only time will tell.
Below is a timeline USPS developed for closing Post Offices (9 months or longer) vs. “Classified” Station/Branches (4 months)
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Task Name [Post Offices]
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Duration1
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Authorization to Study
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10 days
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Review & Investigation Study (data gathering)
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25 days
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Community Input
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25 days
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Proposal* Posting & District Manager Review and Approval
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100 days
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Headquarters Review & Final Determination
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30 days
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Final Determination Posting and Customer Appeal Period*
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30 days
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If appealed, 120 days are added to timeline for PRC Review
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Office Closeout (60 days after posting of final determination)*60 days
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Classified Stations/Branches
Task Name
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Duration1
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Authorization to Study
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5 days
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Review & Investigation Study (data gathering)
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15 days
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Community Input
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20 days
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Proposal (No Posting)
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10 days
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Headquarters Review & Final Determination
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10 days
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Union Notification and Office Closeout (60 days after HQ Decision)
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60 days
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Blind Postal Mail Processing Clerk Determined To Lead Normal Life
Despite pressure from the USPS to retire, that wasn’t an option for Frank Facio, a 29 -year San Diego, CA Postal Employee and Delivery Bar Code Sorter (DBCS) machine clerk:
It is a challenge for every postal employee to run mail-processing machines safely and efficiently on a daily basis. For San Diego Area Local member Frank Facio, that task is more difficult.
Frank Facio
That’s because Facio, who operates a Delivery Bar Code Sorter (DBCS) machine at the Margaret Sellers Processing & Distribution Center, is blind.
“Many people ask how I can work at the Postal Service, being blind,” Facio said. “I always answer with a joke: My job is licking stamps.”
Facio was diagnosed with retinitis pigmentosa at age 17. When he began working as a Letter Sorting Machine operator in 1982, he still had his vision, but it was diminishing rapidly.
Despite pressure from the USPS to retire, that wasn’t an option for Facio.With help from his local union reps, Facio was taken back on the workroom floor, and was shown the DBCS.
“As soon as I saw the machine, I was thinking, ‘What do I need to do to modify this equipment to make it work for me,’” Facio said. “I knew immediately, this was going to be my job.”
Finally, with some machine modifications Facio’s DBCS and the racks that holds the mail trays were brailled – he was
speeding through the mail. He said his goal was to process more than 200,000 pieces of mail on Tour 2 – a feat he and his partner accomplished, processing 226,000 pieces one shift, and then proving it was not a fluke by processing 204,000 pieces the next day.
“No one thought I could do this job,” Facio said, “but it was a big achievement for me. I proved that I could do this job – with no sight and a dog on the floor – just as well as anyone, and my numbers showed it.”
source: The American Postal Worker Magazine
In 2005, PostalReporter.com posted a link to a news story about Frank Facio from the San Diego Union Tribune:
The transition from sight to blindness has been helped by Frank Facio’s positive attitude about the challenges he faces. Undaunted, he and his guide dog, Gina, make the daily trek to work at the Carmel Valley Post Office.
When he first got his job at the post office in Phoenix, Facio already had RP, but he was still able to read addresses on letters. But over time, his work began to slow down, and he had switch departments.
But after transferring to San Diego, he found a home behind the stackers, where he’s been since 1997. This is where Facio finds his rhythm.
Instead of getting depressed or feeling sorry for himself, Facio was determined to lead a normal life and make adjustments along the way.
After More Than 100 years Historic New Jersey Post Office Set To Close
Filed under: post office closings, post offices, postal, postal news, usps
Emergency Suspension of Johnsonburg Post Office In Frelinghuysen Township
After more than 100 years at its present location, the historic Johnsonburg Post Office is set to close its doors in mid-March.
A meeting has been scheduled with the United States Postal Service with regard to the closing of the Johnsonburg Post Office on Friday, March 4th at 6:00 in the Municipal Building, 210 Main Street, Johnsonburg, New Jersey. A representative from the Post Office will discuss the emergency suspension, explain the procedures as to what happens with the mail and delivery and other related items.
Johnsonburg Post Office in FRELINGHUYSEN TWP- Warren Reporter
see more Post Office Closings updated 2/26/11
Former Maryland Letter Carrier Convicted Of Destroying Mail
Filed under: legal cases, postal, postal news, press releases, usdoj
The following is a press release from U.S. Attorney’s Office, Maryland
Greenbelt, Maryland – A federal jury convicted Warren Christopher Bradford, age 41, of Upper Marlboro, Maryland, late yesterday of destroying mail he was entrusted to deliver as a Postal Service letter carrier.
The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Joanne Yarbrough of the U.S. Postal Service, Office of Inspector General; and Interim Chief Mark Magaw of the Prince George’s County Police Department.
According to Joanne Yarbrough, Special Agent in Charge of the Postal Service’s Office of Inspector General, “The overwhelming majority of postal employees work very conscientiously to move the nation’s mail – approximately 171 billion pieces of mail each year – to its proper destination. It is a responsibility they take very seriously. Unfortunately, there are a few postal employees, very few, who abuse the public trust placed in them, but successful prosecutions are a significant victory against offenders. I appreciate the work and partnership of the U.S. Attorney’s Office with these investigations. The American public should remain confident that the majority of the employees of the Postal Service are hard-working and continue to maintain the trust and integrity of the Postal Service.”
According to evidence presented during the three day trial, Bradford was a 15-year employee of the U.S. Postal Service assigned as a letter carrier to the Capitol Heights Post Office in Prince George’s County, Maryland. The evidence showed that beginning in June 2009, customers living along Bradford’s postal route began reporting that they were not receiving mail for days at a time. On September 21, 2009, a citizen called 911 after witnessing a Postal Service employee unloading several trays full of mail from a Postal Service vehicle and discarding them at a secluded location in Capitol Heights. The Prince George’s County Police Officer who responded to the call discovered the three trays of undelivered mail the caller had seen the carrier unload as well as a large amount of burned mail spread across the wooded lot. That officer notified a local Post Office, whose supervisory employees responded to the scene along with agents of the U.S. Postal Service’s Office of Inspector General. There, postal officials recovered mail from Bradford’s route bearing postmarks dating back to June 2009. Postal officials located Bradford at approximately 3:00 p.m. when he returned to the burn site in his postal truck, which still carried nearly all of his route’s mail for that day.
Bradford faces a maximum penalty of 5 years in prison. U.S. District Judge Alexander Williams, Jr., has scheduled sentencing for May 25, 2011 at 9 a.m.
United States Attorney Rod J. Rosenstein commended U.S. Postal Service, Office of Inspector General and the Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Adam K. Ake, who is prosecuting the case
APWU:The Battle in Wisconsin: ‘Are We Next?’
An Urgent Video Message From APWU President Cliff Guffey
“I want to make sure that every APWU member understands the importance of what is happening in Wisconsin,” says union President Cliff Guffey in a video message. The nurses, teachers, firefighters and police of Wisconsin are fighting for the fundamental right to have a voice at work…“for the American values of freedom, fairness, and the right to speak, organize, and negotiate for a better life.”
“If Gov. Walker succeeds in taking away the rights of middle-class working people, other states will follow his lead — and attacks on our right to negotiate will not be far behind,” Guffey says.
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He asks: “If we fail in Wisconsin, who’s next? Are we next?”
APWU members across the country are showing solidarity with embattled public workers in Wisconsin, attending rallies and declaring, “Stop the War on Workers.” Members are encouraged to attend events in their area.
Click here for information about rallies on Feb. 26. Click here for a list of rallies on subsequent days. Please send high-resolution photos or video clips from local demonstrations to Sally Davidow, APWU Communications Department Senior Manager, at sdavidow@apwu.org.
House Subcommittee Hearing: Pushing the Envelope -The Looming Crisis at USPS
The Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy will hold a hearing on March 2, 2011. The hearing titled “Pushing the Envelope: The Looming Crisis at USPS” will examine the fiscal situation of the Postal Service and potential areas for postal reform. Congressman Dennis Ross (R-Fl) is chairman.
Date: Wednesday March 2nd, 2011
Start Time: 1:30 p.m.
Location: 2154 Rayburn House Office Building
Witnesses scheduled
Panel 1
• The Honorable Patrick R. Donahoe, Postmaster General of the United States
• The Honorable Jacob J. Lew (invited) Director, Office of Management and Budget
• Ms. Ruth Goldway, Chairman, Postal Regulatory Commission
• Mr. Phil Herr, Director, Physical Infrastructure Issues at the Government Accountability Office
Panel 2
• Mr. Jim Sampey, Executive Vice President and Chief Operating Officer, Valpak
• Mr. Arthur Sackler, Coalition for a 21st Century Postal Service
• Mr. Fredric Rolando, President, National Association of Letter Carriers