Retired Postal Worker Fights To Get More than Half Of Pension
OPM backlog affecting recent postal retiree.
Mt. Vernon, OH –
A Mt. Vernon veteran who devoted three decades to the U.S. Postal Service as a mail carrier says he is now receiving only about half his pension check from the federal government.
Jon Minard served in Vietnam, losing an eye to a grenade, before returning home and working at the U.S.P.S. delivering mail for thirty years. He worked in Dublin before eventually moving to Mt. Vernon.
When Minard retired last August, he expected his pension check to be there. Instead, he says he is only receiving a little more than half of the $2500 he is owed.
Minard says it is a frustrating chapter to an agency he had always been able to rely on.
source: Veteran Fights Federal Government For Pension Check | NBC 4i.
VIDEO: OPM Introduction to Open Season 2011 Webcast
OPM’s Healthcare and Insurance staff will be hosting five informational webcasts for the 2011 Federal Benefits Open Season. In these webcasts, OPM explains the basics of Open Season and the benefit programs involved. Read more
NALC reacts to USPS statement regarding 2011 FERS contributions
June 22, 2011 — The Postal Service announced on June 22 that it is suspending its bi-weekly contributions to the Office of Personnel Management (OPM) for Federal Employees Retirement System (FERS) benefits (11.7% of basic pay), because its FERS account within the government-wide pension plan has a large surplus, and because it would like to preserve its cash reserves in the face of worsening economic conditions. Earlier this year, the Postmaster General announced that the USPS would not be able to make the $5.5 billion retiree health pre-funding payment scheduled for Sept. 30, 2011, and called on Congress to enact postal reform to avert a funding crisis that will occur when the USPS exhausts its $15 billion debt limit early next year. Read more
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 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
OPM Posts New And Revised Leave Fact Sheets
OPM has posted eight revised leave fact sheets on their website:
Sick Leave (General Information)
Sick Leave for Personal Medical Needs
Sick Leave for Family Care and Bereavement
Sick Leave to Care for a Family Member with a Serious Health Condition
Emergency Leave Transfer Program
Voluntary Leave Transfer Program
They have also posted three new fact sheets:
Definitions Related to Family Member and Immediate Relative
Funeral Leave and Other Bereavement Options
***
Most of these duplicate what is in the ELM. In particular postal employees should see “Effect of Extended Leave Without Pay (LWOP) (or Other Nonpay Status) on Federal Benefits and Programs.” This is the best explanation of the effect of LWOP on federal benefits that I’ve seen anywhere.
Don Cheney
How The Government Shutdown May Affect Current and New Federal Retirees
The National Active and Retired Federal Employees Association (NARFE) has compiled information on how a Government shutdown will affect Federal Workers and Annuitants. The information below covers areas which may apply to Postal Workers:
Annuity Benefits: Judging from similar government shutdowns in the past, and the fact that OPM retirement operations are not funded through general revenues, retirees should expect to receive their annuity payments deposited into their accounts or received in the mail, on time as usual. OPM sends annuity payment tapes to the Department of Treasury in the middle of the month prior to the payment date so that Treasury has time to process the payment tapes/cut checks and ensure that annuity payments are received by the first of the month.
Health, Life, and Long-Term Care Benefits: Federal Employee Health Benefits Program, Federal Employees Group Life Insurance, FEDVIP (dental/vision insurance), and Federal Long Term Care Insurance Program premiums will continue to be withheld and paid by OPM. There will be no interruption in insurance coverage.
Retirement Processing: For those newly retired employees, a government shutdown may delay the processing of your paperwork by your agency, prior to your records being sent to OPM. For those recent retirees whose retirement OPM has already begun to process, there should be no additional delay caused by a government shutdown for the reasons given above.
Retirement and Benefits Information: OPM staff responsible for answering the retirement and health benefits questions asked by federal workers and annuitants will be available during the shutdown. If there is a shutdown, NARFE members will continue to have access to this information by calling or e-mailing the NARFE Retirement Benefits Service Department.
Thrift Savings Plan: The Federal Retirement Thrift Investment Board has stated that a federal government shutdown would not affect the Thrift Savings Plan (TSP) since it does not receive annual appropriations from Congress. The TSP would operate during such a period as usual.
Other Federal Benefits
The Department of Veterans Affair’s (VA) operational plans are still being finalized, but our current understanding is the following:
Thanks to advance appropriations (a two-year budget cycle), VA will continue to provide 100 percent of health care services to enrolled veterans through VA medical facilities across the country. Veterans’ medical appointments will not be canceled or delayed in the event of a partial governmentwide shutdown.
Advance appropriations, received from Congress, account for more than 80 percent of the VA’s discretionary appropriations.
While there will be a reduction in benefits staffing, the VA has taken measures to ensure, in the short-term, that veterans currently receiving VA benefits will continue to receive those payments on a timely basis and without interruption.
The VA will also continue to provide final resting places at our national cemeteries in the event of a partial governmentwide shutdown. Some cemeteries may operate on a modified schedule.
Some VA services that may be suspended in the event of a partial governmentwide shut down involve answering consumer inquiries by e-mail, telephone or mail, routine recruiting, hiring and training, and fraud investigations.
Social Security, Medicare and Medicaid: Others, like the Social Security Administration and the Centers for Medicare & Medicaid Services, operate under indefinite appropriations. In such cases benefits payments continue to be issued and honored by the Department of the Treasury because there is no lapse in the relevant appropriations.
Complied by the NARFE Legislation and Retirement Benefits Service Department on April 7, 2011
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
OPM: Retirees Fed Tax Withholding Increases, Annuity Check Decreases In 2011
The Office Of Personnel Management issued the following anouncements:
Annuitant Federal Tax Withholding Increase
On December 16, 2010, Congress elected not to extend the “Making Work Pay” credit. The “Making Work Pay” credit, part of the 2009 Stimulus Package, expired on December 31, 2010. This could mean higher federal tax withholding amounts in monthly annuities for federal retirees. The Internal Revenue Service (IRS) issued a notice in December 2010, stating withholding tables for 2011 would no longer be adjusted for the Making Work Pay tax credit and there is no longer an optional additional withholding adjustment for annuities. The adjustment is reflected in the Notice of Annuity Adjustment received by annuitants in January 2011.
With the expiration of the temporary credit, IRS tax withholding tables have changed for 2011 and many retirees may see an increase in the amount of federal tax being withheld from their monthly annuity payments as a result. OPM uses tax withholding tables that are provided by the IRS and questions about changes to those tables must be referred to the IRS, not OPM. The tax rates did not change; only the withholding tax table changed. For more information concerning the 2011 federal tax withholding tables go to www.irs.gov. See IRS Notice 1036, TABLE 4-MONTHLY Payroll Period.
You may change your federal tax withholding by accessing www.opm.gov/retire or calling OPM at 1-888-767-6738 from 7:30am to 8:00pm EST. There is a federal tax calculator on our website that may assist you in determining the amount of federal tax to withhold. Changing the amount of your withholding will not reduce your tax liability at the end of the tax year. You may also want to consider contacting your tax advisor.
Important information about your February 1 annuity payment
The Internal Revenue Service (IRS) did not release the 2011 income tax withholding tables until mid-December 2010. OPM did not receive the tax withholding tables in time to apply them to your January 3, 2011 annuity payment.
The 2011 income tax withholding amounts have now been applied and will affect your February 1, 2011, payment and all subsequent payments in 2011. You will receive a Notice of Annuity Adjustment in late January 2011 describing the February 1, 2011, payment, including information about any new income tax amount withheld from your annuity.
Please note that the tax rates did NOT change; only the withholding table changed.
The amount withheld from your annuity could change because:
- Your annuity amount changed.
- The withholding tables changed.
- You asked OPM to make a change.
For information regarding Federal income tax, please visit the IRS website at www.irs.gov.