Perhaps it is time for the Postal Service to consider offering a healthy incentive for APWU represented employees to retire. The wage difference between a Grade 6 Step 0 employee and a newly hired replacement is $18,000 per year ($53,102 vs. $35,182) so for every 1000 employees replaced, the Postal Service saves 18 million dollars per year. It would be in their financial interest to entice those employees eligible for retirement to retire.
The Postal Service is strapped for cash so it will not be easy to fund the cost of an incentive, but there are creative ways to defer the cost while generating savings. In the previous effort, agreement was reached to spread the incentive over two years to lessen its immediate impact on the USPS’ financial position and other innovative approaches could be explored.
The problem is that employees, who are eligible, refrain from severing their employment for a variety of personal reasons and continue to work for lack of an alternative that meets their objectives. An incentive would influence many who will otherwise continue their employment for an indeterminable period.
The consideration of offering an incentive does not include what is known as “early outs” permitting employees to retire earlier than the legal formula. The Postal Service must receive the approval of OPM to offer early outs and such permission will not be granted, if it is intended to replace the retiring employee. Early outs cannot be used to reduce payroll costs.
At a time when the Postal Service is experiencing severe financial problems brought on by the unreasonable payment for future health care costs consideration should be given to this opportunity for significant savings.