USPS Early Retirement Offer With Incentives Coming?

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.

Tennessee Congressman to Super Committee: Stop Early Retirements

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

USPS Wants to Offer Eligible Postal Workers Early Retirement?

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

NAPUS President Discusses Early Outs and Incentives in Meeting With PMG

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

Editorial: Update – Does the Postal Service Really Want Early Retirements?

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.
 
Don Cheney
Auburn WA

Burrus: It’s Time For USPS To Consider Offering Healthy Retirement Incentive

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.

In solidarity,
Bill Burrus

Burrus Journal

USPS Offering Retirement Incentives To Some Supervisors in NY, Honolulu, NJ, Carribbean Districts