Federal Disability Retirement and the U.S. Postal Service: Lack of Loyalty & Full of Shortsightedness
The following is an article from Attorney Robert R. McGill written exclusively for PostalReporter:
There was a time when the U.S. Postal Service worked in conjunction with the Department of Labor (under FECA/OWCP) to keep hard-working Postal employees who were injured on the job, with offers of modified duties to retain a productive workforce. It was a time when the USPS was forward-looking; when competition from other companies was of no concern, because the USPS had the most productive workforce and could compete with the best of them. Part of the reason why this was so was because of a conceptual paradigm which is fast disappearing: Loyalty.
Loyalty, as a working corporate model, requires a bilateral conceptual paradigm. By retaining injured workers and providing them with meaningful work in a modified environment and tools, the U.S. Postal Service was daily telling its people: You worked hard for us those many years; we will work with you and remain loyal.
Fast-forward to the present day. Postal Workers who for several years have worked under the Rehabilitation Job Offer Guidelines, are suddenly handed a letter which states: “Notice of No Work Available within the operational needs of the service.” The letter goes on to delineated the fact that such determination of unavailability of work is based upon a “comprehensive review” of the USPS operational needs and comparing them to the current medical documentation of the injured Postal Employee. What is missing in this “new” paradigm? Does this reflect an organization which looks to its competitors with a positive view to challenging them in the marketplace? Does it value its employees? Does it engender a desire on the part of its workforce to work harder, be more competitive, and to expend all efforts to the point of excellence? Or, does it act like a wounded animal, fearful of its own shadow, and trying to protect its executive-level benefits and perks?
In professional football, how many times have we seen the team try and protect its 3-point lead for the remainder of the game? What inevitably happens?
Under the National Reassessment Program (the “NRP”), the U.S. Postal Service is attempting to validate a methodical paradigm of cutting its workforce by going after everyone who is less than “fully productive”. By doing so, it has destroyed any sense of corporate unity and company loyalty.
The Postal Worker today who is subject to the NRP is left with limited choices. On the one hand, he or she can accept the determination of the U.S. Postal Service that “no work is available”, and go on to file for benefits under FECA/OWCP. However, the Postal Worker must recognize that OWCP is only a temporary system of monetary compensation. Another avenue which the Postal Worker needs to consider is to file for Federal Disability Retirement benefits under FERS or CSRS. While Federal Disability Retirement benefits do not pay as well as OWCP benefits (generally, 60% of the average of one’s highest-3 consecutive years the first year, then 40% every year thereafter, under FERS; a different calculation under CSRS), it provides for one benefit which FECA/OWCP does not: independence and separation from the government entity.
Loyalty is a dying concept. It was a concept which was alive and well when, once upon a time, companies took the long view, looked to the future, to its continuum of growth and prosperity, and sharing that vision of a bright future with its employees. For the essence of loyalty always encapsulated a sense of the long term – of “being in it together” through prosperous times, as well as challenging times. Of course, even during the primacy of the U.S. Postal Service, Federal Disability Retirement benefits were still there for Postal employees (and similarly for all Federal employees) who could no longer perform one or more of the essential elements of one’s job. The interesting thing, of course, is that many Postal employees continued to work at modified jobs offers by the U.S. Postal Service, because of their sense of loyalty and commitment.
Indeed, when the United States Court of Appeals for the Federal Circuit rendered its opinion in the case of Bracey v. Office of Personnel Management, 236 F.3d 1356 (Fed. Cir. 2001) — most Postal employees continued to work at their modified jobs, despite being eligible for Federal Disability Retirement benefits. Bracey is still the prevailing case addressing the issue of accommodations for Federal and Postal employees. It stands for the proposition that a Federal or Postal employee is eligible for Federal Disability Retirement benefits even if he or she works in a “light duty”, modified position which may include “an ad hoc set of light duties” and may even continue “to pay the employee at the same level as before.” (Bracey, 236 F.3d 1356, at p.1362). Thus, while some may argue that the primary reason why injured Postal employees continued to work at the U.S. Postal Service was because the jobs were “easy” and that they couldn’t find a better-paying job elsewhere, the truth of the matter is that the vast majority of Postal Workers continued to work under the Rehabilitation Job Offer Guidelines because of an overriding belief that it was a career worth pursuing.
Loyalty was still a paradigm which Postal Workers believed in. With the implementation of the National Reassessment Program, in conjunction with the deep economic recession which the country is undergoing presently, Postal employees should not feel that filing for Federal Disability Retirement benefits is an act of “disloyalty”. Loyalty, in order for it to retain its meaningful paradigm, must at its core reflect a bilateral proposition. By initiating and implementing the National Reassessment Program, the U.S. Postal Service has abrogated its core pledge of loyalty. As such, the U.S. Postal Worker is left with a unilateral avenue of loyalty – one which must now be viewed with a singular focus: not upon the best interests of the organization that once was – that competitive entity called the U.S. Postal Service; no, rather, that singular focus must be concentrated upon the best interests of the individual Postal Worker. Federal Disability Retirement is an avenue which allows for independence and a foundation of income; it is something to be considered.
Attorney Robert R. McGill specializes in securing Federal Disability Retirement benefits for Federal and Postal workers under both FERS and CSRS. He represents Federal and Postal employees from all across the United States, from the West Coast to the East, and every state in between, as well as Alaska, Hawaii, Puerto Rico, Europe, Japan, etc. For more information about his legal services, please visit his OPM Disability Retirement and U.S. Postal Service Disability Retirement websites.
© 2010 PostalReporter.com – This article may not be reproduced without express written consent.
Hayward Letter Carriers Met, Married and Retire While Working at Same Post Office
HAYWARD — It was a match made in Hayward’s Post Office more than 30 years ago. Ron McMahan spied Peggy standing at the time clock, ready to begin work. “Would you go out sometime?” he asked. “I would if someone asked me. You can call me,” she replied. “That stopped him for a moment,” Peggy recalled, “because it was a long–distance call. I told him he could call collect.” Ron called. But not collect.
Fast–forward three decades. The couple, both letter carriers at Hayward Post Office (Ron has 43 years of service, Peggy 36), have decided to hang up their mail bags and deliver their appointed rounds for the last time when they report to work at 7:30 a.m., on Friday, July 2, 2010.
After dating for nine months, Ron popped the marriage question at Columbia State Park. “Let me think about it,” Peggy said.
Their first retirement plan is to head for the Caribbean on the Oasis of the Sea. After that, “Guess we’ll have to go fishing,” Peggy grumbled, good–naturedly. “She likes to fish, but only when they’re biting,” Ron explained.
Ron said he’s ‘worked’ for the post office in Hayward since he was nine. “My dad started as a postal worker in 1957 at the Cypress Annex. I’d hang out in the swing room and play, waiting for him to get off from work. Then, in 1967, I joined him working here.”
Between the two of them, the McMahans have over 80 years of service credit, including sick leave hours. They are both Million Mile drivers, a prestigious driver–safety record denoting zero motor vehicle accidents while driving over a million miles respectively during their postal careers. Together, they have driven the equivalent of driving coast–to–coast 668 times without ever leaving the city limits.
They are the only known married couple in the Postal Service to achieve a million miles of safe driving, and to retire on the same day.
They agree that their customers are like family. “We’ve watched as families have grown, as children have been born,” Ron said. “And we keep an eye out for whatever is going on in the neighborhood.” Peggy works in a residential area with many retirees. The McMahans have heard the same refrain from customers: “Please don’t retire! ”
“Our customers share their lives with us,” Peggy said. “We’re all one big family,” Ron added.
source: USPS
USPS OIG: Fixing CSRS Overpayment and pre-funding requirements would fully fund pension and retiree health benefits
The economic downturn and the continued electronic diversion of mail, coupled with an aggressive retiree health pre-payment schedule have combined to put the Postal Service in financial crisis. A recent analysis of the future of the mail conducted on behalf of the Postal Service showed that mail volume may not recover along with the economy – further deteriorating the Postal Service’s financial condition in the years to come. Moreover, in its April 12 report entitled, “U.S. Postal Service: Strategies and Options to Facilitate Progress Toward Financial Viability,” the Government Accountability Office (GAO) found This report presents the results of our review of the Civil Service Retirement System (CSRS) Overpayment by the U.S. Postal Service (Project Number 10YO036CI000).This report discusses the $75 billion CSRS overpayment by the Postal Service in fiscal years (FY) 1972 through 2009. The objective of this review was to assess the facts concerning this overpayment and identify any possible solution(s) to correct the overpayment to the benefit of the Postal Service. This review addresses financial risk.See Appendix A for additional information about this review.
On May 5, 2010, the U.S. Postal Service Office of Inspector General (OIG) entered, for the record, the attached Congressional testimony with the U.S. Congress in addition to the oral testimony previously given by the Postal Service’s Inspector General (IG) before Congress on April 15 and 22, 2010. 1 The attached testimony (See Appendix B) explains, in detail, the Postal Service’s $75 billion overpayment to the CSRS and three possible solutions to correct the overpayment contained in the IG’s written testimony of May 5, 2010. (See Appendix B pages 13 – 16)
Conclusion
The Postal Service pension fund is not made up of tax dollars. The two funding streams are the employees’ own money and money collected from postage sales, with inflated prices as a result of the $75 billion overpayment. See Appendix C for OIG’s detailed monetary impact calculation. The return of the overpayment or a combination of actions to realize the benefit of the $75 billion overpayment to the Postal Service would fully fund the pension and health retiree plans. The Postal Service’s more than $7 billion annual payments for retiree health care prefunding and retiree health care premiums would no 1 The April 15, 2010, Hearing before the Committee on Oversight and Government reform and the Subcommittee on the Federal Workforce, Postal Service, and the District of Columbia House of Representatives and the April 22, 2010, Hearing before the Senate Homeland Security and Governmental Affairs Committee’s Subcommittee on the Federal Financial Management, Government Information, Federal Services, and International Security.
How the $75 Billion overcharge started:
In July 1971, when the Post Office Department became the Postal Service, employees that belonged to the federal pension fund began contributing to the Postal Service’s portion of the pension fund. These retirement costs were divided according to the number of years employees had belonged to each fund. However, the federal pension fund paid for retirements was based on 1971 salaries, not final salaries as administered by the Office of Personnel Management (OPM).
OPM has explained that these mischarges were in response to what they believed to be the will of Congress expressed in 1974 legislation. However, the 1974 language was repealed by Congress in 2003. Congress directed OPM to use its authority to oversee the reforms using accepted “dynamic assumptions” that include pay increases and inflation. OPM switched to dynamic funding for the Postal Service portion, but did not for their share. The Postal Service paid the $75 billion difference.
In 2004, the Postal Service appealed the OPM’s methodology for pension fund allocation and the appeal was denied by the OPM. The denial relied on 1974 legislation that made the Postal Service responsible for the pension costs related to salary increases. However, the 1974 language was repealed by Congress.
In addition, the OPM directed the Postal Service to use 100 percent pre-funding for both pension and health care retirement funds. In contrast the OPM has pension funding levels of 41 percent for federal employees and 24 percent for the military. The OPM’s own retiree health care prefunding for federal employees is 0 percent. The Standard & Poor’s 500 companies’ pension funding is 80 percent.
Correcting either the $75 billion overcharge or reducing the 100 percent target prefunding level to 80 percent would result in the ability of the Postal Service to pay off the Treasury debt associated with paying the $75 billion overcharge.
Accordingly, the annual costs and premiums for the health care liability could be financed out of the interest earnings and surplus. Another option for the Postal Service could be to use the $75 billion overcharge to pledge to the retiree health fund instead of making annual payments. This could be done with the agreement of the OPM and the U.S. Treasury.
The details concerning each of the three possible solutions can be found in the appendix of the attached Congressional testimony.
See Full Report: Management Advisory Report – Civil Service Retirement System
Overpayment by the Postal Service (Report Number CI-MA-10-001).
Federal Disability Retirement under FERS or CSRS: Understanding the Different Perspectives and Differing Interests
by Attorney Robert R. McGill
As with most things in life, attempting to secure a Federal Disability Retirement annuity under FERS or CSRS requires an extraordinary amount of time, effort, planning, and the collection, formulation and coordination of a compendium of information. Multiple questions arise at the early stages of planning: Can I live on 60% of the average of one’s highest-3 consecutive years of salary for the first year, then upon the second and subsequent years at 40% (planning stage)? Will my doctor support me (collection of information stage)? How must it be stated, and what must be stated, on the Applicant’s Statement of Disability (Standard Form 3112A, both for FERS & CSRS) (formulation stage)? How do I get the doctor to cooperate, make sure my Supervisor does his or her portion, and who fills out the Agency Certification of Reassignment and Accommodation Efforts (SF 3112D) (coordination stage)? And these are just a small fraction of the questions one needs to ask in preparing to file for Federal Disability Retirement benefits.
Before engaging in the minutiae of preparing an application for Federal Disability Retirement, it is often a good idea to take a macro-perspective of the process as a whole.
What a potential applicant for Federal Disability Retirement needs to understand, at a minimum, are the varying perspectives of (potentially) differing interests involved in the totality of the process of this “thing” called Federal Disability Retirement under FERS or CSRS. The four (4) main interests involved are: (1) The individual applicant who will be filing for Federal Disability Retirement benefits; (2) The Agency for which the applicant works; (3) The Doctor who is treating the applicant who is contemplating filing for Federal Disability Retirement benefits; and (4) The Office of Personnel Management. The key to success in filing and winning an approval is to recognize the different perspectives of each of the four main interests, to coordinate the differing interests, and then to formulate a plan to garner the proper support from each.
Thus, let us take each interest in the order listed:
1. The individual applicant who is contemplating filing for Federal Disability Retirement benefits under FERS or CSRS. Whether because of medical conditions which have impacted the physical body – from Cervical, Lumbar or Thoracic degenerative diseases, or Shoulder Impingement Syndrome; Lupus; Multiple Sclerosis; Parkinson’s Disease; Carpal Tunnel Syndrome; Plantar Fasciitis; Multiple Chemical Sensitivity (including allergies); Fibromyalgia; Chronic Fatigue Syndrome; Migraine headaches; or a host of other medical conditions not listed (this is not intended to be an exhaustive list, by any stretch of the imagination) – to Psychiatric diagnoses of Major Depression, Generalized Anxiety Disorder; panic attacks, Agoraphobia; Obsessive-Compulsive Disorder; ADD or ADHD; Autism Spectrum Disorders (including Asperger’s); Post Traumatic Stress Disorder, etc. (again, this list is not meant to be exhaustive), the important point is to know that the individual has come to a stage in his or her life where a medical disability has become so intractable, despite surgery, physical therapy, medication regimens; psychotropic medications; psychotherapeutic intervention; and multiple other reasonable modalities of treatments – all of which have been merely temporary and palliative in nature; but work is and has been suffering; and the individual cannot perform one or more of the essential elements of the job, and the medical condition is expected to last for a minimum of 12 months. The time has come to file. Work and career have been a major part of one’s life, and it is difficult to come to acknowledge the reality that such work cannot be performed anymore, and the years invested with an Agency must come to an end. This is where “quality of life” issues become important: Am I coming home each day just to recuperate to make it to work for another day? Am I using up so much LWOP that my performance is suffering? Am I in danger of being placed on a PIP? Is my Agency thinking about terminating me? Before it reaches a critical point, it is important to begin planning; and the first step in planning is to acknowledge bluntly and forthrightly, that the time has come to file for Federal Disability Retirement under FERS or CSRS.
2. The Agency for which the applicant works. Agencies are strange organic entities. They reflect, on a microcosmic scale, the people at all levels who work for the Agency. Don’t ever expect that loyalty is a bilateral avenue – it is not. Your loyalty for twenty years to an Agency will not be remembered on the day you start to impede the mission of the Agency. An employee’s loyalty to an Agency is rewarded only to the extent that the level of performance reflects positively upon the immediate Supervisor. Once the performance level begins to falter, the true avenue of loyalty reveals itself: it is a unilateral avenue. Your years of loyalty are forgotten. Is there a solution to this problem? To some extent; by persuading those who are open to persuasion, that the applicant for Federal Disability Retirement benefits and the Agency have a common goal: the Agency wants the vacant position which the applicant presently fills; the applicant wants to secure his or her financial security by obtaining Federal Disability Retirement benefits. Thus, the emphasis upon the commonality of goals can result in a positive result which is beneficial to both parties.
3. The Doctor who is treating the applicant. He or she is the critical linchpin of the case, and to garner the support of the most valuable resource in a Federal Disability Retirement case is essential. By his or her very nature, the doctor hates such administrative details of the job. To be asked to write a medical narrative report is anathema to the very essence of who a doctor is. A doctor is trained to treat patients. The administrative headaches of writing a convincing, excellent narrative report is the last thing that a doctor wants to do. It is therefore critically important to explain to the doctor, in clear and concise terms, the nature of Federal Disability Retirement; how it differs from Social Security or Worker’s Comp; what elements and issues need to be addressed in the narrative report; and why helping to obtain Federal Disability Retirement benefits is in the best interests of the patient.
4. The Office of Personnel Management. This is the toughest out of the four. This is the Agency which receives and reviews all Federal Disability Retirement applications under FERS or CSRS. They apply the legal criteria in determining whether or not the applicant qualifies. Not everyone who makes a decision is fully informed of the governing laws, and so it is imperative that an Application for Federal Disability Retirement is well-formulated, concisely written, descriptively delineated, and supported by credible medical documentation. The Office of Personnel Management (OPM) will never meet you; you are a faceless entity with merely a paper trail. As such, the paper submission must be convincing, persuasive, and meet the burden of proof by a preponderance of the evidence.
A successful Federal Disability Retirement application under FERS or CSRS, submitted to the Office of Personnel Management, must take into account all of the four (4) interests described above, and coordinate them, taking into account the differing perspectives which will often involve seemingly opposing interests. It is the ability to garner the support of each, to coordinate and extrapolate the advantages from each, and to compile, formulate, and prepare an excellent presentation which will have a high chance of being approved by the Office of Personnel Management. This is where one might consider the “5th” entity – that of an Attorney who specializes in Federal Disability Retirement laws. It is a consideration worth pursuing, especially because it concerns the future financial security of a Federal or Postal employee which we are speaking about – you.
Attorney Robert R. McGill specializes in federal disability retirement cases helping Federal and Postal workers secure their disability retirement benefits under both FERS and CSRS.
Postal Retirees Not Paid – Get Busy Signal When Calling OPM Toll-Free Number
Many APWU members who retired in October have reported that they still have not received regular annuity checks. We also have heard that many retirees receive a busy signal every time they call the Office of Personnel Management (OPM) on the agency’s toll-free number.
This is an intolerable situation, and I have met with OPM officials several times in an effort to resolve these problems. I will continue meeting with OPM to resolve our members’ complaints. Currently, issues are being addressed on an individual basis. Please contact my office if you are experiencing a problem obtaining information about retirement and need assistance.
In a February letter to John Berry, OPM Director, Sen. Barbara Mikulski (D-MD) sharply criticized OPM’s “delayed efforts to modernize their retirement information system.” These delays have inconvenienced APWU retirees for years.
Mikulski also addressed complaints about the “length of time required to calculate service credit deposits and re-deposits, COLAs, and court-ordered benefits.” She noted that 132,000 federal employees that have complained about lack of access to information that they need to plan for retirement. “In a time of strained family budgets, federal employees retirees need certainty and reliable information; this cannot be a casual endeavor for your office,” she wrote.
APWU Retirees Department
Early Retirement Rumors: Again, APWU Says: Don’t Go!
Burrus Update
Rumors about Voluntary Early Retirement offers are once again circulating throughout the Postal Service, and employees are evaluating the possibilities.
Let me state plainly:
* There have been no discussions with postal management about offering new monetary incentives as an enticement for retiring.
* If incentives are contemplated at some future date, the law says they must be negotiated with the union.
* Any rumor that monetary incentives are under consideration is false.
In recent years the Postal Service has offered Voluntary Early Retirements (VERs) — without monetary incentives — without the union’s involvement. Management may do so again in the future.
The APWU has challenged these VER offers in the appropriate forums. As we noted in grievances protesting non-incentive VERs, the National Agreement requires the payment of severance pay to employees who voluntarily terminate their employment through early retirement.
We await final disposition of the dispute. In the meantime, it is very likely that postal management will pursue further reductions in the employee complement through Voluntary Early Retirement offers.
The union repeats the advice we offered regarding prior VERs without incentives: Don’t Go!
William Burrus
President
Update: USPS To Offer Early Out Retirement To Employees In San Francisco and Bay-Valley Districts
Clerks, Mail Handlers, Custodians, Maintenance Operations Support Clerks and EAS in Select Offices to Receive Early Out Notices
Bay-Valley District -OaklandFor the following offices only: Oakland P & DC, SF NDC, District Cusotmer Service, Antioch, Berkeley, Brentwood, Carmel, Concord, Cupertino, Danville, El Cerrito, Fairfield, Hayward, Hollister, Lafayette, NAPA, Newark, Oakland PO , Pittsburg, PLeasanton, Richmond, Salinas PO, San Leandro, Santa Clara, Saratoga, Union City, Vallejo, Walnut Creek and Watsonville.
San Francisco District: This week, April 5 – 9, annuity estimates and Voluntary Early Retirement (VERA) offers are being mailed to approximately 1,000 VERA eligible employees in the San Francisco District. The notices are being sent ONLY to Clerks, Mail Handlers, Custodians, Maintenance Operations Support Clerks and EAS employees who are domiciled south of the Golden Gate Bridge. North Bay and Northern California employees WILL NOT receive a VERA offer in the mail.
USPS has announced that it is offering early out retirement only to employees in selected offices. Postal facilities on the list have been notified and will schedule a stand-up very soon with employees.
VER is being offered to Clerks, Mail Handlers, Custodians and EAS employees.
You may retire if you meet the age and service requirement shown below:
- Age 50 with 20 years of Service
- Any age with 25 years of Service
Shared Services will be mailing out letters and annuity estimates from April 5-13 to VER-eligible employees. VER retirement application deadline and irrevocable date will be May 21, 2010. The effective date is June 2010. There is no incentive with this early out retirement offer.
Civil Service Retirement system (CSRS): Your annuity benefit will be reduced by 2% for each year (1/6% per month) that you are under age 55 on date of retirement and the reduction is permanent.
Federal Employees Retirement System: If you meet the above requirements, your annuity benefit will not be reduced with age. Special Retirement Supplements are payable until age 62 when you reach the minimum retirement age (55-57). Social Security benefits begin when you reach age 62.
Copy oif Notice from San Francisco District
Postal Service to Add Self-Service Retirement Feature to LiteBlue
From PostalReporter reader:
The Postal Service will add a new feature (eRetire) to LiteBlue which will provide employees the option of using self-service to begin the retirement process. It is anticipated that this option will become available in late March or early April 2010.
eRetire is a web-based system which allows employees to:
View an annuity estimate if they are within (5) years of retirement; Download a retirement packet or order a retirement packet to be mailed; Begin the retirement process by selecting the desired retirement date
eRetire does not replace the option of contacting HRSSC to begin the retirement process or discussing individual questions with a specialist before or during the process.
USPS Incentive Offer Available to Postal Employees Seeking Disability Retirement
APWU News
The union has received a number of inquiries recently seeking clarification about whether employees who retire on disability are eligible for the incentive negotiated by the APWU, President William Burrus said.
“The agreement does not exclude such employees,” he noted. “The Memorandum of Understanding provides for an incentive of $15,000 for employees who retire or separate.”
The issue is addressed in Question #8 in the USPS-APWU Memorandum Of Understanding Re: One-Time Retirement Incentive — Questions and Answers [PDF].
[more Retirement, Separation Incentive news]
Union Address Concerns About USPS Retirement Incentive Offer
Burrus Update 15-2009, Sept. 22, 2009
The union has received inquiries about the possibility that some applicants for the $15,000 retirement/separation incentive may be excluded because the agreement negotiated by the union limits the number of recipients to 30,000. This concern is especially troubling for employees applying for Voluntary Early Retirement (VER), because the right to revoke applications will expire on Sept. 25, before employees know whether they will receive the incentive.
To date, fewer than 21,000 employees have applied for the incentive or expressed interest, so there may be no reason for concern; however, in the event that the number of applicants reaches 25,000, pursuant to the Memorandum of Understanding between the APWU and the USPS, the union and management will meet at the national level to decide the distribution of the remaining 5,000 slots between Mail Handler applicants and APWU-represented employees.
If it is anticipated at that time that the 30,000 limit will be reached, we will also decide who among the eligible employees will receive the incentive. Included among the options for consideration will be increasing the number of employees who will receive the incentive or permitting employees to cancel their retirement.
Employees should not be concerned that they will have committed to retire without assurance that they will receive the incentive.
William Burrus
President