Postal Employees Should Delay Retirement Until Passage of Postal Reform Bill
All APWU represented employees who are retirement eligible should consider delaying their retirement until the Postal Reform efforts have been concluded. Each of the legislative initiatives (Issa – Carper – Obama) includes the return of the $7 billion overpayment with authorization to use it for retirement incentives. Retroactivity is probably unachievable so to secure eligibility, employees should protect themselves. If the $7 billion is returned, postal management has an incentive to replace existing employees with new hires whose wages will be significantly less. Read more
COLA Announced: Federal Retirement Annuities Will Rise in 2012
Federal retirees will receive a cost-of-living adjustment (COLA) to their civil service annuities beginning in January 2012. Retirees in the Civil Service Retirement System (CSRS) will receive a 3.6 percent increase to their annuities, while retirees in the Federal Employee Retirement System (FERS) will receive a 2.6 percent increase to their annuities.
To trigger a COLA for 2012, the average CPI-W for the months of July, August, and September of 2011 needed to rise above the 2008 average for those same months, the last measurement to trigger a COLA (for 2009). It did, by 3.6 percent. While CSRS retirees receive the full amount of the CPI-W increase as a COLA, current law reduces the FERS COLA by 1 percentage point for increases above 3 percent.
Because the CPI-W showed declining prices from 2008 to 2009, and while it showed prices increasing between 2009 and 2010, it did not show prices increasing back to 2008 levels, there has not been a COLA for the last two years. But finally, we have some good news for 2012!
Under current law, COLAs for federal retirement annuities, as well as for military retiree annuities and Social Security payments, are determined in reference to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is calculated by economists and statisticians with the Bureau of Labor Statistics. The CPI-W is the current index used for measuring increases in the prices of consumer goods throughout the economy. It includes prices on all consumer goods, including food and beverages, housing, clothing, transportation, medical care, recreation, education and communication, and more.
The new CPI-W figure for September 2011 was 223.688. The average CPI-W for the third quarter of 2011 was 223.233. This is the new reference figure for determining the 2013 COLA.
NARFE continues to support strong COLAs based on fair assessments of increases in consumer prices to protect the value of federal annuities from inflation.
source: NARFE
Tennessee Congressman to Super Committee: Stop Early Retirements
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
USPS Wants to Offer Eligible Postal Workers Early Retirement?
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
Congressman Issa’s Bill Would First Layoff Retirement Eligible Postal Employees
Filed under: politics, postal, postal news, retirement, usps
Congressmen Darrell Issa and Dennis Ross’ amendment to its Postal Reform bill will require USPS to “separate” all retirement eligible employees prior to laying off any workers not yet eligible for a pension, and to “separate” the most senior of them first: Read more
NAPUS: Postal Subcommittee to Vote on HR 2309
Filed under: Congress, politics, post office closings, postal, postal news, retirement, usps
PR: Issa/Ross Postal Reform Bill Will Include Amendment To Boot Out Retirement-Eligible Postal Workers
From the National Association of Postmasters of the US:
Postal Subcommittee to Vote on HR 2309 On Wednesday, the House Subcommittee on the Federal Workforce, the Postal Service and Labor Policy will take up Rep. Darrell Issa’s (R-CA) postal legislation, HR 2309. NAPUS opposes the legislation for a number of reasons, including our strong belief that the bill would have a devastating effect on postal services to rural America. The bill seeks $1 billion in savings through closing post offices. The measure undermines a community’s lawful right to appeal an arbitrary or unsupported post office closure, eliminates the requirement that the Postal Service provide “a maximum degree of service” to rural areas, abolishes the prohibition against closing a post office solely for running a deficit, and creates a commission to close post offices. Read more
Editorial: Update – Does the Postal Service Really Want Early Retirements?
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.
Don Cheney
Auburn WA
OIG: More Early Retirements Would Create Additional Cost Savings For USPS
But….
From the Office Of Inspector General:
The single largest Postal Service expense after compensation is purchased transportation. In 2010, the Postal Service spent $5.9 billion moving mail between cities with contracted highway, air, rail, and water transportation.
Overall, offering more early retirements for eligible employees would create additional cost savings. For retiree health benefits, there would be little total savings. Generally,the Postal Service would have to pay more for FEHB premiums in retirement but it would save on premium costs for the employee. As the Postal Service pays a greater share of premium payments for employees than the rest of the federal government (discussed earlier in this paper), it would save as Postal Service retirees pay premiums according to federal rates. The problem, however, is how to incentivize further buyouts
that the Postal Service cannot afford to offer in its current financial state.
Labor expenses are also affected by the way the Postal Service utilizes labor. Table 1 shows the number of Postal Service employees by category in 2010 and 2000. Since 2000, the Postal Service has shed over 200,000 career employees (26 percent), and has experienced an 18 percent drop in volume while increasing the number of delivery points by 10 percent. The top four employee categories by size are still city carriers,clerks, rural carriers, and mail handlers, although they have switched order since 2000 as some new automation and efforts to optimize the network have further reduced the complement of clerks.
As mail volume declines, the Postal Service has made a great effort to reduce its employee complement. This has been aided by the high number of retirement eligible employees in the postal workforce. The number of career employees has declined by more than 100,000 from 2006. In 2009, the Postal Service offered retirement incentives According to the Postal Service, that early retirement offer saved the organization nearly $350 million.26 Postal commentators have advocated for even more aggressive efforts to reduce the number of employees.
These retirements raise the question of what effect early retirement has on the Postal Service’s retirement obligations. Table 2 offers some insight into this issue. It describes the effect on both current employee costs and future retirement obligations, which it is assumed the Postal Service will have to fund fully at some point. The assumption is that employees who retire early are not replaced by new employees. The effect of pension increases versus salary increases is also not considered. Employees who retire earlier typically receive a smaller annuity. However, retirees receive automatic pension increases based on inflation in retirement. If these inflation increases are greater than 100,000 from 2006.In 2009, the Postal Service offered retirement incentives to certain employees, and more than 20,000 clerks and mail handlers took advantage.25 According to the Postal Service, that early retirement offer saved the organization nearly $350 million.26 Postal commentators have advocated for even more aggressive efforts to reduce the number of employees.These retirements raise the question of what effect early retirement has on the Postal Service’s retirement obligations. Table 2 offers some insight into this issue
Federal-Postal Employees Coalition Urge Obama To Reject Proposals Damaging To Workforce
Filed under: politics, postal, postal news, retirement, white house
A coalition of federal and postal employee organizations wrote a letter to President Barack Obama urging him to reject proposals aimed at the federal workforce. The groups major concern is the proposal to require federal employees to contribute a much higher share towards their retirement annuity which in effect is a pay cut. Read more
USPS Pacific Area to offer VER to carriers and clerks
USPS Newsbreak: Voluntary Early Retirement to be offered to carriers and clerks in select locations
In a move to further right-size complement levels to better match workload, the USPS Pacific Area is offering a voluntary early retirement (VER) to carriers and clerks working at select impacted sites and at non-impacted offices within a 50-mile radius of the impacted sites.
VER offer sites and timelines will be announced when the information becomes available.
These changes are part of the Pacific Area efforts to streamline operations, increase efficiencies and reduce costs in support of the Postal Service’s action plan to ensure a strong, viable organization now and in the future.
For more information, contact your local Human Resources office.