APWU Web News Article 69-2012, June 4, 2012
The APWU has engaged in informal conversations with the Postal Service about financial incentives for retirements and separations, but no official offers have been made or discussed, union President Cliff Guffey reports.
“We expect the Postal Service to make a formal request to negotiate over early-outs and incentives after several other outstanding issues have been addressed,” he said.
APWU members will be notified of developments. For the latest information, visit www.apwu.org
USPS is offering a Voluntary Early Retirement (VER) opportunity to employees represented by the National Postal Mail Handlers Union (NPMHU). In addition, USPS has reached an agreement with the NPMHU to offer a separation incentive to employees the organization represents.
Earlier this month, USPS announced plans to move ahead with a modified plan to consolidate its network of 461 mail processing locations in phases. The first phase of activities will result in up to 140 consolidations through February of 2013.
Details of the VER and incentive plan are available on the Workforce Connection website on LiteBlue. Major provisions include:
All career employees covered by the USPS-NPMHU National Agreement are eligible for the incentive offer, with a few exceptions that are detailed in the Memorandum of Understanding.
The total incentive amount for full-time NPMHU bargaining unit employees is $15,000. Eligible participating NPMHU employees will receive an initial incentive payment of $7,500 on Dec. 21, 2012 (less required deductions and withholdings). The remaining $7,500 will be paid on or about Dec. 20, 2013 (less required deductions and withholdings).
The incentive program is available to eligible employees who notify USPS on or before July 2, 2012 of their intent to participate in the VER, optional retirement, or voluntarily resign and who separate effective Aug. 31, 2012.
Part-time career employees also are eligible for the incentive on a prorated schedule.
Optionally eligible employees may begin the process immediately by using eRetire or by contacting the Human Resources Shared Service Center (HRSSC) at 877-477-3273. VER-eligible employees will receive an offer letter and kit with required documents to initiate the process. Eligible employees selecting resignation also may begin the process immediately by contacting HRSSC. All retirement-eligible employees will receive offer letters and annuity estimates at their mailing address during the week of May 29.Dec. 20, 2013 (less required deductions and withholding.)
GET ON WITH IT
Something doesn’t add up. Congress has introduced legislation authorizing the use of the retirement overpayment as incentives for eligible employees to retire. The postmaster general repeatedly tells everyone who will listen that he plans to reduce the work force through voluntary retirements without replacing the employees, while tens of thousands of eligible employees who meet the retirement eligibility await the announcement that incentives are being offered. Yet, the USPS’ revenue is not sufficient to meet its expenses. OK, if all of these things are true, why hasn’t the Postal Service offered incentives to reduce the compliment? Natural attrition has slowed to a trickle as normal retirement has been deferred awaiting the incentive. An employee would be foolish to retire without an incentive, if it is expected that shortly they will be entitled to $25,000 extra for doing what they plan to do.
The normal excuse of the Postal Service not having the funds to pay the incentive does not make sense because they have enough money to continue paying the employees every two weeks in an amount that is four times the incentive that is being considered. It is clearly contradictory that they can continue to pay the employees who are waiting to retire $60,000 a year because they cannot afford to pay the employees $12,500 in 2012 and 2013. Added together, the Postal Service is willing to pay these employees $120,000 over a two year period instead of $25,000.to incentivizes them to retire. The math just does not add up.
Assuming that the Postal Service uses available resources as an excuse to delay paying the incentives, it won’t wash. It is obvious that they have more than sufficient resources because they continue to meet the bi-weekly payroll. The simple fact is, if they have a financial problem they cannot afford “not to pay” the incentive(s) as soon as possible and cut their losses.
If the issue is service and the removal of X number of employees from the rolls will adversely affect 1, 2 and 3 day delivery, this will not change when and if Congress passes legislation. Either they need 550,000 employees to process, transport and deliver the declining volume or they do not. If they can get by with 30,000 fewer employees, they save big bucks by reducing the complement as soon as possible. Delaying the incentive(s) will not result in some employees retiring and missing the opportunity of receiving free money. The simple logic is “get on with it.”
The U.S. Postal Service may resort to early retirements and buyout offers as a way to slash its staff by 66,000 employees this year and another 51,000 next year. Combined, the planned cuts over the next two years amount to more than one-fifth the agency’s workforce.
Office of Personnel Management Director John Berry said Wednesday that Postmaster General Patrick Donahoe alerted him a week earlier that USPS could offer both early retirement and buyout incentives to encourage employees to leave.
Chief Financial Officer Joe Corbett on Thursday outlined for reporters the Postal Service’s ambitious plans to pare down its workforce in the next five years by 155,000 employees — ultimately reaching an end strength of 402,000 by the end of fiscal 2016.
Normal attrition removes roughly 30,000 employees a year, so it appears likely the agency will have to resort to either early retirement offers or buyouts or both to reach its downsizing targets. The agency’s labor contracts generally prohibit layoffs.
Corbett told reporters in a conference call that early retirement incentives are under consideration, but he did not discuss the possibility of buyouts.
full story via Federal Times.
APWU President Cliff Guffey told the delegates to the APWU National Presidents Conference in Las Vegas, NV today, I am certain there will be an early retirement offer for APWU members with incentives once the Postal Service fully complies with our demands.
Filed under: early out, postal, postal news, press releases, retirement
The following is a press release from John J. Duncan, Jr. (R-TN 2nd district):
Rep. John J. Duncan, Jr. in a letter this week urged the Congressional “Super Committee” tasked with finding trillions of dollars in savings in the federal budget to put a stop to early federal retirements. Read more
Filed under: early out, postal news, retirement, usps, ver
As Don Cheney pointed out:
With all the other commotion going on, most eligible postal employees have overlooked this. I’m amazed anyone would retire right now without waiting to see what comes out of Congress by November 18th, the new deadline for USPS to make its $5.5 billion payment. Read more
From the National Association of Postmasters of the US (NAPUS):
In yesterday’s monthly meeting with Postmaster General Patrick Donahoe, NAPUS President Bob Rapoza discussed Voluntary Early Retirements (VERs), Incentives and adding years of service as possibilities to help ease the financial burdens of the USPS. While many options are being considered as the Postal Service attempts to reduce the number of on roll employees, President Rapoza suggested that VERs, Incentives and adding years of service should be strongly considered as part of the process. Read more
Filed under: early out, postal, postal news, retirement, usps
A year ago I speculated in the PostalReporter News Blog, “In recent VERAs the Postal Service issued FERS annuity estimates that omitted the employee’s FERS annuity supplement. The FERS annuity supplement is often nearly equal to the basic annuity amount. Was that to discourage early retirements so they can justify weakening the no-layoff clause in upcoming contract negotiations?” My suspicions have proven correct. Recently the Postal Service asked Congress to authorize layoffs of career employees without offering VERs first.
The response rate to USPS early retirement offers has been poor. Lots of postal employees eligible or potentially eligible for the FERS annuity supplement have complained they didn’t know how much it was. When they called the HR Shared Services Center, they couldn’t get this information. Will the Postal Service continue to fail to provide this information?
I applaud Ernie Kirkland of the National Association of Letter Carriers for raising this issue in Federal Times. The other postal organizations have been strangely silent. OPM’s “CSRS and FERS Handbook,” Chapter 40, Section 40A2.1-3.N, requires the Postal Service to furnish an estimate of the FERS annuity supplement to eligible employees upon request. Most other federal agencies do.
FedBens.us will calculate the exact amount of your FERS annuity supplement using the same method as OPM. You will need your annual FERS earnings history. Estimates that use your Social Security record are less accurate, because your Social Security record includes work not covered by FERS and FERS service prior to age 22, neither of which is counted in calculating the supplement. You can learn more at FedSmith.com.
I should add that there is a common misconception (not dispelled by USPS) that you have to reach age 59 ½ to withdraw your Thrift Savings Plan funds without an IRS early withdrawal penalty. There is an exception. When you retire or separate, the minimum age to withdraw your TSP funds without an IRS early withdrawal penalty is 55. If you retire or separate before age 55, you can still avoid the IRS penalty by choosing an annuity or leaving your money in the account. See TSP publication 536, “Tax Information: Payments From Your TSP Account.”
Postal employees in FERS normally need 30 years of federal service to get the FERS annuity supplement before age 60. Many don’t know, and aren’t told, that in a VERA, RIF, or involuntary transfer over 50 miles the minimum service requirement is reduced to 20 years. FERS employees who retire (other than on disability or MRA+10) at less than age 62 will always receive an annuity supplement. The FERS annuity supplement begins when you reach your MRA (about age 56). It ends at age 62 when you become eligible for Social Security.
Filed under: APWU, early out, postal, postal news, retirement, usps
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.