Rep. Lynch: Hearing On Reducing Retirement Benefits is Really Attack On Federal Workers
Rep. Dennis Ross, R-Fla., on Wednesday introduced a bill that would increase how much federal employees pay toward their retirement and steeply reduce pensions for new employees.
HR 3813, the Securing Annuities for Federal Employees Act, would raise contributions for current Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) employees by 0.5 percentage points per year for three years, beginning in 2013. This would make FERS employees contribute 2.3 percent of each paycheck toward their pensions, and require an 8.5 percent contribution from CSRS employees.
The bill would eliminate the so-called FERS annuity supplement for new retirees beginning in 2013, except for employees facing mandatory retirement such as air traffic controllers. Today, FERS employees who retire before reaching age 62 receive a supplement equal to the Social Security benefit they will be eligible for once they reach age 62. Read more
Editorial: FERS & CSRS Disability Retirement – Defending a Necessary Benefit
Filed under: Articles, Benefits, CSRS, FERS, postal, postal news
An exclusive article to PostalReporter.com written by Attorney Robert R. McGill
Does the Emperor receive his standing because of his hereditary anointment by the gods, or because of his superior governance abilities? Or, by giving generously to the lords and vassals and currying favor among them, does he retain power? Or, by giving lifetime gifts to the masses? Fear the emperor who consolidates power by doing the latter; for mob rule knows no boundaries, laws, or heavenly dictates. Power by lawlessness is indeed the origin of the reign of terror. – From, The Shadows of Machiavelli
Article 1, Section Eight, Clause 7 of the U.S. Constitution specifically empowers Congress to “establish Post Offices”, and to that extent, it is always important to recognize that the U.S. Postal Service is not merely a convenience or a Federal mandate which merely exists because some Senator or Congressman decided that it would please his or her constituents; rather, the Founding Fathers recognized the necessity of establishing a network of interstate commerce and communication between the various states, and the importance thereof.
As a Constitutional creation, the Postal Service deserves a special place in the budgetary process and decision-making deliberations during these times of debt-reduction efforts, of political conversations and debates. Where it is a Constitutional creation, the employees of such an entity should be provided with a compensation package which is commensurate with its status as a recognized and vital part of the Federal government. Federal Disability Retirement should remain a part of every Postal Worker’s compensation package, for reasons which are Constitutional, pragmatically justifiable, and because it is a progressive paradigm of cost-savings. Read more
White House Proposals For USPS in Deficit Reduction Plan
From the President’s Plan for Economic Growth and Deficit Reduction
Provide Postal Service financial relief and undertake reform.
The Administration recognizes the enormous value of the U.S. Postal Service (USPS) to the Nation’s commerce and communications, as well as the urgent need for reform to ensure its future viability. USPS faces a long-term, structural operating deficit that has been exacerbated by the precipitous drop in mail volume in the last few years due to the economic crisis and the continuing shift toward electronic communication. Absent legislative intervention, USPS will be insolvent by the end of September 2011 when it will be unable to make the statutory $5.5 billion Retiree Health Benefit prefunding payment to the Office of Personnel Management, will have exhausted its cash reserves, and will have hit its cumulative statutory Treasury borrowing ceiling of $15 billion. Bold action is needed to ensure that USPS can continue to operate in the short-run and achieve viability in the longrun. Read more
PMG says suspension of FERS payment won’t affect employees
Yesterday, USPS said it’s suspending the employer’s contributions for the defined benefit portion of the Federal Employees Retirement System, or FERS. The Postal Service said it was taking this step to conserve cash and preserve liquidity.
Today, PMG Pat Donahoe — in a video message to employees — says the suspension will not affect them. Noting that USPS has a surplus of $6.9 billion in payments to FERS, he says “We simply are stopping this ongoing overpayment toward the annuity FERS retirees receive because we have already met that obligation.”
Donahoe says the suspension is “only a stop-gap measure,” adding Congress must approve legislation that can help the Postal Service return to profitability. As he has in the past, the PMG urges Congress to eliminate the requirement for pre-payments to the retiree health benefits fund; grant USPS access to the FERS overpayment; and give the Postal Service flexibility to determine the frequency of mail delivery.
Senator Carper Statement on USPS Decision to Suspend FERS Payments
WASHINGTON – Today, Sen. Tom Carper (D-Del.), chairman of the subcommittee with jurisdiction over the U.S. Postal Service, released the following statement reacting to the Postal Service’s decision to suspend its Federal Employees Retirement Systems (FERS) payments:
“Today’s drastic action by the U.S. Postal Service underscores the urgent need for Congress and the Administration to act quickly to address the serious financial problems facing the Postal Service. In essence, this is the canary in the coal mine moment for the Postal Service. If we don’t heed this warning and act quickly, the Postal Service as we know it will cease to exist in the very near future, possibly by the end of this fiscal year. This would effectively shut down the U.S. mailing industry that depends on the Postal Service. A shutdown of an industry of its magnitude, with some 7 million employees and more than $1 trillion in revenue every year, would be catastrophic to our fragile economic recovery.
“It’s estimated that the Postal Service has overfunded its obligations to the Federal Employees Retirement Systems (FERS) by about $7 billion. The Postal Service’s decision to suspend payments to FERS is just one painful step of many that may be necessary to help keep the Postal Service solvent in the short term. It will not, however, fix all that ails the Postal Service.
“Earlier this year I introduced comprehensive legislation, the POST Act, to address the significant challenges facing the Postal Service and to put the Service back on a solid financial path. We need to move quickly on this effective and comprehensive legislation before it’s too late. My bill requires all parties – postal management, employees, customers, and the Postal Service’s competitors – to make sacrifices to ensure the solvency of the Postal Service over the long term.
“It also gets Congress out of the way by providing the flexibility and tools necessary to address the problems plaguing the Postal Service in an effective way. One of the reasons why the Postal Service finds itself in this precarious financial state is that for decades it’s overpaid into not only FERS, but also to the older Civil Service Retirement System (CSRS), totaling between $50 billion and $75 billion. Currently, it is unlawful for the Postal Service to use these overpayments to meet other overall Postal Service expenses. My bill would change that.
“I’d like to thank the Obama Administration for working with the Postal Service to take this difficult short-term action without threatening postal employees’ pension eligibility. I urge the Administration to deepen its cooperation with the Postal Service and Congress in the coming days to help us find a long-term solution to ensure the Postal Service’s survival. Despite the dire fiscal outlook, there is hope for the Postal Service’s future. We can turn things around by quickly passing comprehensive legislation, such as the one I’ve proposed, that would give the Postal Service the room it needs to manage itself and avoid it becoming the latest victim of Congressional gridlock.”
source: http://carper.senate.gov/public/index.cfm/2011/6/sen
USPS, OPM Request Legal Opinion From Department Of Justice on FERS Payments
Statement by U.S. Office of Personnel Management On Postal Service’s Decision to Suspend FERS Annuity Contributions
The US Postal Service is facing serious challenges. OPM is sympathetic to the situation in which the Postal Service finds itself, and we stand ready to help the Postal Service in whatever way we can, consistent with our legal obligations and role as the fiduciary for the Retirement and Disability Trust Fund (the Fund).
There is currently a surplus in the portion of the Fund covering Postal Service employees. The Postal Service’s position is that, in light of this surplus, it should be permitted to suspend making Federal Employees’ Retirement System (FERS) annuity contributions. We understand that, based on this position, the Postal Service intends to cease making further FERS annuity contributions effective June 24, 2011.
Both the Postal Service and OPM have agreed to seek a resolution of the important legal issues surrounding the Postal Services’ decisions by submitting a request for a legal opinion to the Office of Legal Counsel (OLC) at the Department of Justice.
Our aim is to protect the Postal Service employees to the greatest extent possible under the law. We have thus determined that while these issues are pending with OLC, we will be able to continue to give employees who retire credit for service rendered after the Postal Service ceases making FERS annuity contributions on June 24.
This determination is supported by the Postal Service’s assurance it will make the FERS annuity contributions it is now ceasing if OLC disagrees with its position. This means that there will be no negative impact on future postal employees’ retirement. Current postal retirees will not be impacted at all. It is our most fervent hope that the issue is resolved as quickly as the law allows.
The US Postal Service is facing serious challenges. OPM is sympathetic to the situation in which the Postal Service finds itself, and we stand ready to help the Postal Service in whatever way we can, consistent with our legal obligations and role as the fiduciary for the Retirement and Disability Trust Fund (the Fund).
There is currently a surplus in the portion of the Fund covering Postal Service employees. The Postal Service’s position is that, in light of this surplus, it should be permitted to suspend making Federal Employees’ Retirement System (FERS) annuity contributions. We understand that, based on this position, the Postal Service intends to cease making further FERS annuity contributions effective June 24, 2011.
Both the Postal Service and OPM have agreed to seek a resolution of the important legal issues surrounding the Postal Services’ decisions by submitting a request for a legal opinion to the Office of Legal Counsel (OLC) at the Department of Justice.
Our aim is to protect the Postal Service employees to the greatest extent possible under the law. We have thus determined that while these issues are pending with OLC, we will be able to continue to give employees who retire credit for service rendered after the Postal Service ceases making FERS annuity contributions on June 24.
This determination is supported by the Postal Service’s assurance it will make the FERS annuity contributions it is now ceasing if OLC disagrees with its position. This means that there will be no negative impact on future postal employees’ retirement. Current postal retirees will not be impacted at all. It is our most fervent hope that the issue is resolved as quickly as the law allows.
source: OPM Press Release
APWU President: ‘We Will Take Every Step Necessary To Ensure Retirement Benefits Are Protected’
The American Postal Workers Union is working fervently to make certain that the Postal Service’s decision to suspend employer contributions to FERS does not negatively affect the nation’s postal employees, President Cliff Guffey said on June 22. “We will take every step necessary to ensure that retirement benefits are protected. We are currently evaluating the best course of action.”
There is a solution to the Postal Service’s financial crisis, he noted:
- The USPS has overfunded its FERS and CSRS retirement accounts by billions of dollars;
- It is the only employer — public or private — that is required to pre-fund the healthcare benefits of future retirees. This obligation drains more than $5 billion annually from the USPS budget, and is the principal cause of the Postal Service’s dire financial circumstances.
|
“Congress must act now to correct these inequities,” Guffey said. “It can start by passing H.R. 1351, which would allow the Postal Service to apply pension overpayments to the pre-funding obligation. This bill would provide the USPS relief from its financial crisis at no cost to taxpayers.
The Postal Service’s financial predicament is the result of flawed legislation (the Postal Accountability and Enhancement Act of 2006) that Congress can and must correct, the union president added.
“Postal workers did not cause USPS financial problems and their retirement benefits should not be jeopardized to solve them.”
source: APWU
USPS Notifies OPM of Its Intention to Suspend Employer’s Contributions To FERS
Filed under: FERS, opm, postal, postal news, press releases, usps
U.S. Postal Service Institutes Cash Conservation Plan- FERS account surplus valued at $6.9 billion
WASHINGTON — The U.S. Postal Service has informed the Office of Personnel Management (OPM) of its intention to suspend its employer’s contributions for the defined benefit portion of the Federal Employees Retirement System (FERS) to conserve cash and preserve liquidity. The Postal Service has a FERS account surplus valued at $6.9 billion. Read more
OPM Memo: Recredit of Sick Leave for Re-employed FERS Retirees
The following is a Memo released by the Office Of Personnel Management (OPM)
Recredit of Sick Leave for Re-employed FERS Annuitants Who Retire Between October 28, 2009, and December 31, 2013
The U.S. Office of Personnel Management has been asked whether employees covered by the Federal Employees Retirement System (FERS) who retire between October 28, 2009, and December 31, 2013, with 50 percent of their sick leave having been credited toward their FERS annuity computation, could have the remaining 50 percent of their sick leave recredited to their sick leave account if they return to Federal service as reemployed annuitants. The answer is yes. Agencies should recredit reemployed annuitants the 50 percent of sick leave that was not used in their FERS annuity computation. For employees who retire or die in service on or after January 1, 2014, all unused sick leave to the employees’ credit will be creditable for annuity computation purposes. Further, for FERS employees who retire on or after January 1, 2014, 100 percent of their sick leave will be used in the annuity computation, consequently, no sick leave will remain for recredit should the retirees later return to Federal service.
Agencies must take action to identify FERS employees who initially retired on or after October 28, 2009, and who have since returned to Federal service as reemployed annuitants, to ensure that the employees have received recredit of the 50 percent of sick leave that was not used in the computation of their annuities.
Background
Section 1901 of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84, October 28, 2009) amended 5 U.S.C. 8415 to provide that employees covered by FERS who retire on an immediate annuity, or die while in active employment leaving a survivor or survivors, between October 28, 2009 (the date of enactment of the statute), and December 31, 2013, will receive credit for 50 percent of their unused sick leave towards their total creditable service for annuity computation purposes.
Additional Information
For additional information, please refer to Benefits Administration Letter Number 11- 102, Guidance on National Defense Authorization Act for Fiscal Year 2010 Provisions on Sick Leave for FERS Retirees.
Agency Human Resources (HR) Directors may also contact their assigned OPM Human Capital Officers. Reemployed annuitants should contact their agency human resources or benefits offices for assistance.
From: Charles D. Grimes III
Acting Associate Director
Republicans Introduce Bill To Eliminate FERS Retirement For New Hires
Republican Senators Richard Burr, (R-NC) and Tom Coburn (R-Oklahoma), on Thursday introduced a bill (S. 644) that would eliminate the pension portion of the Federal Employees Retirement System (FERS) for all new federal employees hired after 2012. The legislation would not affect Thrift Savings Plan benefits and agency-matching contributions. It also will not affect FERS pensions for current federal employees and retirees. It would, however, apply to members of Congress.
Press Release
Today, U.S. Senator Richard Burr (R-North Carolina), along with Senator Tom Coburn (R-Oklahoma), introduced the Public-Private Employee Retirement Act of 2011 to address long-term liabilities facing the federal government. The legislation would end the defined benefit pension portion of the Federal Employee Retirement System (FERS) for new federal government hires starting in 2013, leaving fully in place the Thrift Savings Plan with the current match (up to 5%) for both current and future federal workers. The bill would also apply to Members of Congress.
“Right now, federal government workers receive far more generous retirement benefits than private sector employees. The cost to taxpayers of these benefits is unsustainable and we simply cannot afford it,” said Burr. “We cannot ask taxpayers to continue to foot the bill for public employee benefits that are far more generous than their own.”
“The congressional pension plan currently in place only serves to foster political careerism and should have been frozen years ago. In addition to enjoying a better benefits package, federal workers generally earn up to 20 percent more than their private sector counterparts. When American families across the country are being asked to sacrifice in order to meet their basic needs, federal employees and members of Congress should not be the exception. Defined benefit pension plans are going belly-up across the nation because politicians and employers continue to make promises they cannot keep. Existing federal employees will be unaffected, and all federal employees would continue to enjoy a 401(k)-style pension plan with a very generous federal match. But the only responsible thing to do is stop making irresponsible commitments and forcing future generations to pick up the tab,” said Dr. Coburn.
Currently, federal workers enjoy both a defined benefit pension and a Thrift Savings Plan (equivalent to a 401(k)) with up to a 5% match, paid for by the taxpayers. The average private sector employee gets a 401(k) with a 3% employer match and no pension. Federal workers also continue to enjoy federal health care benefits (FEHBP) after they retire, a benefit that is becoming increasingly rare in the private sector.
Current federal government employees and retirees would not be impacted by the changes in the Burr-Coburn bill.