APWU Web News Article 69-2012, June 4, 2012
The APWU has engaged in informal conversations with the Postal Service about financial incentives for retirements and separations, but no official offers have been made or discussed, union President Cliff Guffey reports.
“We expect the Postal Service to make a formal request to negotiate over early-outs and incentives after several other outstanding issues have been addressed,” he said.
APWU members will be notified of developments. For the latest information, visit www.apwu.org
(May 24, 2012) After in-depth discussions between NPMHU and management officials at the headquarters level, the Postal Service is offering financial incentives during a new round of retirement and separation opportunities for most Mail Handlers.
Under the terms of a Memorandum of Understanding signed by both parties on May 22, 2012, eligible Mail Handlers who choose to leave employment with the USPS on or before August 31, 2012 will each receive incentive payments totaling up to fifteen thousand dollars (for full-time employees). The MOU also provides a moratorium on excessing in all facilities until at least August 11, 2012 (unless excessing was already scheduled). This provision should eliminate excessing in some facilities that will now have vacancies due to retirements, and may provide vacancies closer to home for other employees who have to be excessed after August 11.
The monetary incentives included in the MOU will be available (with certain restrictions) to all Mail Handlers who are currently eligible for regular retirement, voluntary early retirement, and all other employees who may wish to separate from the Postal Service. Any Mail Handler wishing to participate in this retirement incentive offer must do so no later than July 2, 2012 — which date, as detailed in the MOU, is the deadline for accepting this incentive offer, and also is the deadline for revoking a submitted acceptance. Read more
From the National Association of Postal Supervisors:
The Postal Service held informational sessions on Wednesday, February 22, 2012 in advance of the release of the listing of Plant closures and consolidations that has been released today. NAPS was provided a copy of the list this morning and has provided this list to you along with this message.
There are still many unanswered questions that will be resolved shortly. One of the biggest questions from our membership is the possibility of an incentive that would accompany the closures and consolidations. While the final decision has not yet been made, in the meetings that the resident officers have participated in, we have been advised that there will be an incentive option but that the final decision on the exact parameters of the proposed incentives have not been completed. As soon as any incentive plan is announced, NAPS headquarters will disseminate the information to the field.
The resident officers are attending a briefing with the Postmaster General, Patrick Donahoe, at 1:00 p.m. Eastern Time. Should any new information be shared at the briefing that is not included in this message we will send it to you upon our return to our headquarters offices.
Please share the Plant closure and consolidation information with your membership. Also reinforce the need to be in contact with your United States Senators about the recommended changes that we are supporting for S 1789.
It “may” be incentives with early out retirement
Feb. 22-23, 2012
Area Mail Processing and facility consolidation studies completed
As we heard in September of last year, the Postal Service is facing difficult decisions in light of its dire financial situation. Mail volume has dropped by more than 43 billion pieces in the past 5 years and is
continuing to decline.
With this dramatic loss, maintaining the Postal Service’s infrastructure at its current size is no longer realistic. This reality has forced the Postal Service to propose a comprehensive overhaul of its
processing and transportation networks.
Postmaster General Pat Donahoe has been sharing information with us through his “State of the Postal Service” video series. Today, he will talk more about the network changes. Please watch, and I will
have more details afterwards.
As the PMG explained, most of the Area Mail Processing and facility consolidation studies begun in September are now completed. Based on those studies, the Postal Service has made the decision to move
mail processing operations from the [STUDY SITE] to the [GAINING SITE].
Implementation of this move is contingent upon the outcome of proposed revisions to existing service standards. In addition, no implementation will take place prior to May 15 of this year, in keeping with a moratorium on closing or consolidating postal facilities, to give Congress and the Administration the opportunity to enact an
This was a difficult decision but a necessary one. With the economic downturn, the Postal Service is facing declining mail volume and increasing costs. This has left us with excess capacity at many processing plants. We have to match our resources with mail volume to hold the line on expenses. This move will help us to do that.
As a result of this action, staffing adjustments will be necessary. Any actions taken will be in compliance with applicable law, collective bargaining agreements, and Postal Service regulations and policies.
Until a transition date has been announced, mailers will continue to be able to enter mail at Business Mail Entry Units (BMEUs) at their current facilities.
In the short term, there will be no changes to locations or operating hours of BMEUs, or retail units, co-located with any facilities that were part of the studies just completed. A 120-day notice will be provided before any BMEU moves, consolidations, or changes to hours of operation.
As we heard from the PMG in his video, if the Postal Service reduces the size of its network, it also will have to reduce the size of the workforce. In that regard, the Postal Service is continuing to work with the unions and management associations about possible incentives.
Let me be clear: there is no decision on any possible incentive at this point in time, and there are no further details on what an incentive offer would entail.
If an incentive program is approved and offered, details will be posted on the new HR Web page, Workforce Connection.
The U.S. Postal Service may resort to early retirements and buyout offers as a way to slash its staff by 66,000 employees this year and another 51,000 next year. Combined, the planned cuts over the next two years amount to more than one-fifth the agency’s workforce.
Office of Personnel Management Director John Berry said Wednesday that Postmaster General Patrick Donahoe alerted him a week earlier that USPS could offer both early retirement and buyout incentives to encourage employees to leave.
Chief Financial Officer Joe Corbett on Thursday outlined for reporters the Postal Service’s ambitious plans to pare down its workforce in the next five years by 155,000 employees — ultimately reaching an end strength of 402,000 by the end of fiscal 2016.
Normal attrition removes roughly 30,000 employees a year, so it appears likely the agency will have to resort to either early retirement offers or buyouts or both to reach its downsizing targets. The agency’s labor contracts generally prohibit layoffs.
Corbett told reporters in a conference call that early retirement incentives are under consideration, but he did not discuss the possibility of buyouts.
full story via Federal Times.
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
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
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
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.
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