Wednesday, August 12, 2009

The Postal Service's Early-Retirement Snafu

Better communication, not additional incentives, is all the Postal Service needs to entice more employees to retire early, a union leader says.

The USPS is providing incomplete benefit estimates to eligible employees, according to Don Cheney, a long-time leader of the Auburn, Washington APWU local who has worked extensively on early-retirement issues for the past six years. In some cases, USPS is providing eligible employees with early-retirement estimates that are at least $1,000 per month too low, says Cheney, who has written several articles about USPS retirement programs for PostalReporter.com

USPS is also failing to counter the common misconception that most eligible employees would be penalized if they take early retirement, according to Cheney.

Noting the importance of early retirements to USPS’s downsizing efforts, Dead Tree Edition reported last week that only 3% of eligible employees have accepted the latest offer because they want to avoid a penalty. But the penalty applies only to employees in the pre-1983 retirement plan known as CSRS, which is less than 20% of the workforce, rather than to the newer FERS plan, Cheney says.

“The U.S. Postal Service failed to promote the unique advantages of VERA [voluntary early retirement] to FERS employees,” Cheney says. “FERS was designed to be a flexible and portable retirement system.”

For example, USPS is not telling FERS employees about the annuity supplement they can receive from age 56 to 62, he says. That normally requires 30 years of service, but the early-retirement program reduces that to 20 years. And because the Postal Service has skimped on retirement counseling, most employees don’t realize that money in their Thrift Savings Plan accounts can be “withdrawn as an annuity at any age without an early withdrawal penalty.”

Postal workers who try to get more information about VERA benefits face a Catch-22 situation -- a USPS notice that for VERA it “cannot verify whether employees are on the eligibility listing or discuss individual questions/concerns until application for early retirement is submitted and approved.”

“Once an application is approved, it is past the deadline to withdraw!” Cheney told Dead Tree Edition. “Who is going to risk applying for VERA under these circumstances without knowing in advance what their FERS annuity supplement is going to be, what deposit must be made for military service after 1956, their eligibility to keep their insurance benefits, etc?”

When an early-retirement package was offered to APWU members six years ago, postal workers came to Cheney for help because he was president of the Auburn local. He remembers one woman in particular.

“People in personnel could not answer her questions. So I read everything I could about FERS. Like FERS-eligibles today, she could not get from USPS an estimate of her FERS annuity supplement, although she was . . . eligible for it. Six years later, FERS-eligibles still get the run-around when they ask about their FERS annuity supplement.”

Recent Cheney articles about early retirement include ones countering the notion of a penalty for early retirement and another claiming that USPS lacks an automated system for calculating VERA benefits.

It's not every day that a union leader says, basically, "You don't need to give us more money, just tell us what we're due."

The atrociously low response to early-retirement offers is evidence enough that the Postal Service needs to rethink its efforts. If even half of what Cheney says is true, the Postal Service is missing out on a seemingly easy, humane, and cost-effective way to carry out a much-needed thinning of its ranks.

See the follow-up article "What the Postal Service Left Out of the Early-Retirement Deal"
about the enhanced early-retirement package the Postal Service announced for some employees in late August of 2009.

30 comments:

Anonymous said...

The APWU is talking out of both sides of the mouth. During the Early Retirement periods the APWU President (Burris) was encouraging his membership not to take the Early Retirement but to wait for incentives. Now it would appear they have changed while blaming the PO for not telling people?

Anonymous said...

I am 56 years old, FERS, and took the early out on June 30th, 2009. No, the Post Office did not inform me of the supplement, but I did educate myself on the FERS retirement system long before the VER. When it was offered I knew that I was getting out 3 years early with no penalties and would be elgible for my supplement.

My point being that the Post Office was partly to blame for incomplete information, but FERS employees should also educate themselves about their retirement system and take some responsibility.

Anonymous said...

1-I'm CSRS;27 years and counting. I'm facing a 6% cut of my retirement.And you want me to leave? get real!!!
2- How many FERS employees are 56 and over? I'll guess 5-10%
3-Does the APWU ever question Congress on the sneakiness of our employer? Get a real grass roots group together that tells them like it is without fear.

Anonymous said...

There are over 100,000 CSRS employees eligible for early retirement with 30 years in why on earth would I take a 4% penalty rather than wait 2 more years. The USPS still doesn't get it. DROP THE PENALTY FOR CSRS AND WE WILL RETIRE!

Anonymous said...

WHY??? would Cheney say incentives are not needed. Come on APWU get the most for your members. Afraid too many will leave and they wont be replaced by dues payers?????

Anonymous said...

NO INCENTIVE !!!! WHAT A DUMMY!!!! WITH CSRS I GET THE PENALTY. FOR LEAVING 30 MONTHS EARLY I LOOSE 5% OF MY RETIREMENT(I AM 30 MONTHS AWAY FROM 55 YEARS OLD) THAT IS 5% OF THE AMOUNT I HAVE ALREADY EARNED(ALREADY EARNED!!!) AND THEN IF I WAS TO STAY 30 M0RE MONTHS I GET THAT 5% BACK IN MY POCKET AND EARN AN ADDITIONAL 5% FOR STAYING. SO LEAVING 30 MONTHS EARLY IS A 10% LOSS AND THAT EQUALS A $500 DOLLARS A MONTH LOSS. DO THE MATH DUMMY...NO INCENTIVE NO LEAVING THE INCENTIVE IS 30 MORE MONTHS TO GO FOR $500 DOLLARS MORE A MONTH FOR LIFE PLUS ANTICIPATED COLAS ADDED TO THIS AMOUNT!!

Anonymous said...

I can't believe this guy is a union guy with this crappy suggestion that the USPS does not need to offer incentives to get people to leave early. Of course the USPS needs to offer incentives unless a person enjoys living at the poverty level! I would like to see this guy live on less than $2000 a month with any quality of life. A regular retirement with 30 years in will just barely cover the bills let alone a early retirement with 20 years in. The reason only 3% took the last early-out is that it sucked even with the supplement. I didn't work all these years just to barely exist when I retire. I will probably work about 36 years to boost my retirement and pad my depleted TSP unless these goons offer some real incentives!

Anonymous said...

The APWU will not endorse anything that does not come with free booze and a veggie platter

Anonymous said...

People dont realize the USPS can only add a monitary incentive (which it dosent have the cash for). Only congress can add years of service thru legislation since the FERS and CSRS systems apply to all fedreral employees.

Anonymous said...

The way for a company in trouble to get people to retire is not to offer new incentives to retire. GM did that, Chrysler did that, and many other hurting companies have done that in hopes that it would help them. Well obviously that method usually does not work because a struggling company that gives away more money will just struggle more. The way to get people to retire is to take benefits away every year. Eventually benefits will have to be eliminated or reduced somehow and although nobody like it, it is the best and kindest long term solution for a struggling company. It helps nobody to make promises that your finances will not allow you to keep. Instead, a lot of people would start to retire if their benefits are reduced by an average of 10% if they don't retire before 2010. It will also lead to a more sustainable retirement for everyone. Those that retire now benefit most because they will lock into a better retirement, but even those that retire after 2010 still benefit because the money they are promised will actually be there without suprises of checks bouncing.

Anonymous said...

NO cola until you are 62, for a FERS retiree! This could result in a HUGE loss in the value of your FERS annuity! 60 yrs of age is the optimum age to retire under FERS, Vera or immediate with 30 yrs. or more, 60 will give you only 2 yrs. loss of cola (2-6%), with the supplement making it cost effective. If you MUST RETIRE, DO NOT retire before your MRA!

John said...

Anyone, who thinks incentives will not prompt a lot of people to accept an early retirement,that would not otherwise, is nuts.Incentives will reduce the rolls a lot more than 3%.Us CSRS people are ready to go,with an incentive.Mr. Cheney states that only 20% of the workforce is CSRS.What percent of the people close to retirement age and service are CSRS? That should also be a target group.Is the USPS serious about cutting the rolls,if so they should make a serious offer.

Anonymous said...

This is absolutely correct. There is no way to confirm what the special supplement will be when retiring under FERS. It is vaguely mentioned in some of the information about retirement, but you just have to take their word for it that it will come. There are ways to guess at a sort of ballpark estimate of the amount, but considering the measly FERS annuity it would be much better to know exactly how much the supplement would be. I chose not to take the last VER just because of this.

Anonymous said...

Our District did conduct retirement information sessions in which we included information about the supplement for FERS employees. I am a FERS employee who was eligible for the VER and it had all the necessary information, including the supplement, included in the packet (blue book) that we received. There is also an excellent retirement seminar that employees can access at home by going into LiteBlue, My Life. With so many people unemployed, we should feel extremely lucky to hold a job and be able to retire with benefits. Let's quit complaining about the Postal Service and try to work together through these tough times so we will be able to retire!!

Anonymous said...

Sirs, In the 80s the USPS offered an early ouy with 5yrs credit for age and 5yrs credit for service,PLUS full years salary. In the 90s it also offered 5 and 5 credit PLUS $25,000. General Motors, after being bailed out, was offering $50,000 for any employee accepting the early out offer.
If the USPS offered the federal gov't norm of $25,000 plus 5 yrs credit for age and service they would achieve the desired number.

Anonymous said...

First, Don Chaney is a local officer in Washington state and doesn't speak for the national APWU. The information he's sharing concerns FERS employees. There is no dispute that the national president, Bill Burrus, has advised members to not take the early out without incentives but this in no way challenges or disputes Mr. Chaney's information. While it is relatively easy to determine the annuity of a CSRS eligible - it is more difficult for FERS eligibles and that is what Mr. Chaney is addressing here.

Anonymous said...

I agree with the Gentleman listed above who stated the prior EARLY OUTS of the 80's and 90's..I worked through both and also pursuaded an ol' carrier to take the one in the 90's. The USPS will "NEVER" achieve the % they are after without asking Congress to do this...NOW!su

Anonymous said...

Why doesn't this guy give the figure for how many people are fers with 20 plus years and between the ages of 56 and 62? Thats a small number and if you left with 20 years under fers at 50k a year your retirement would be 10k ayear plus the supplement of 50% of your social so you'll get about 1400 a month before you tap your thrift! Good luck with that!

Anonymous said...

Postal employees are undereducated, overpaid babies. Go out into the real world and try to get a job making what your making. It wont happen. The unions are totally to blame for the fall of the postal service. Just as the UAW was for the auto industry. Get real people and be happy you have a job

Anonymous said...

I agree. I am very proud to be a USPS employee. You people need to listen to the news and realize how lucky you are. The USPS is in trouble, so let's stop wasting time and money on unnecessary grievances and quit all this whining. Let's work hard to bring the Postal Service back during these tough economic times. Those of you that are so miserable in your jobs, there's nothing to stop you from leaving, but good luck because you're not going to find anything better than where you're at right now!!

Anonymous said...

I'm a CSRS employee with 30 years and a high three of about $60,000, but I'm only 53... if they want me out, they will get serious about an incentive... if they would offer me the same incentive they did in the 80's of 5 years added to retirement... I'd be out in a HEARTBEAT!.... and to comment on bring the Po back to where it used to be .... FORGET IT.... there simply is not enough mail to support all of us anymore and there never will be... something's got to give and it's going to be a day of delivery and alot of jobs.... that's not what you want to hear, but it's simply the fact... the city carriers are 'riding the clock' now to avoid taking Lwop for a couple of hours and the rural carriers, of course, are getting paid less and less with the loss of mail volume to the tune of 7 BILLION $$ (with a B) just this year.... if the USPS is listening.... OFFER us that 5 year to our retirement and we will be out SO FAST!!

Anonymous said...

I was an expert on CSRS, because that was mu retiremrnt plan, but when it came to FERS, I knew nothing. I was a supervisor, and whenever a new employee had a question about ther retirement system, I couldn't help them

Anonymous said...

Fers employee.
Took VER 6/30 . I was told I would get supplement and annuity starting 6
weeks later . 8 weeks later, an estimated annuity $ 100
less than I was told to expect. No supplement.
When I called the retirement services office, I was told process would take 2 to 8 months!
These are the clowns that want to run healthcare !
God help us.

Anonymous said...

Guess what people, if the Post Office goes bankrupt, none of you greedy postal employees will see any retirement checks.

Anonymous said...

TO: "Guess what people, if the Post Office goes bankrupt, none of you greedy postal employees will see any retirement checks"

Sorry - wrong. CSRS is not a Postal Retirement system it is Civil Service, and FERS is not a Postal retirement system it is TSP. The Postal Service controls neither.

Anonymous said...

Cheney i don't know you personally , but how can you say that incentives are not needed ?? That is what all CSRS employees are waiting for. Who doesn't want to retired with $ 20,000 $ 30,000 incentive ?

I'm a CSRS employee from 1977 to 2009
With DPS flats coming means more time on the streets and routes are going to be broken up and put in small squares to save gas. Old timers who have all driving routes with bad knees--bad back will be forced to go back to walking again. I'm not looking forward to that.
I'm waiting for an early out with some cash , so i can get the hell out before DPS flats get here.
I could of retired in May of 2009, but Am waiting and hoping for an early out in early 2010 which i believe is coming.
Cheney incentives not needed ? All CSRS employees who i work with say that if they offer them $ 20,000 or more incentive to retire that they will take it.
I know that unions don't want to lose employees because it means less union dues will be collected. Is the main reason Unions don't want the 5 day mail delivery...
All CSRS employees like me are waiting and hoping for a good early out with incentives to get out of Dodge. Early out in 2010 April ? May ? would be SWEET.
Jose, 32 years as a mail man--4 years in the Marine corps. From Libertyville , Illinois post office.

Anonymous said...

I can't believe how out of touch the Postal Service is if they would make us a offer (real Offer) answer questions they would end there money issues . I can't see why there sitting on there hands -I guess they enjoy being in debt

Victor said...

Well if they didn't restrict the 20 years option I would have left. I have a degree and don't mind trying something new to earn a living.

Anonymous said...

I took the early retirement in March of 2009 following 32.5 years service; the last 18 years as a Postmaster. Not quite 52 years old, I was penalized 2% per each year under 55. With 2500 SL hours banked, I was credited with 34 years service to calculate my pension. I had plans to work in another industry, but they fell through, and we also took a terrible beating selling our home which was a bit too large for us given that all but one of the kids was grown up and out on their own. At the time it seemed like an opportunity to start a new life; however, not much has worked out as we planned. Bottom line is I stronly encourage anyone contemplating early retirement, "Look Very Closely Before You Leap", you never know what's under the surface. When I compare the security of working for the USPS with most every other industry out there, it's a "no-brainer", I wish my wife and I had thought things through more thoroughly before acting. Life would be a whole a lot different for us now. Anyhow, If I've persuaded even one person from repeating the mistake I made, then I'll feel it was worth it to post this comment! Best Wishes!

Anonymous said...

5 years of age, 5 Years service and one year pay in prior retirement incentives in 80s and 90s. This is the first I heard of this. I do not believe that any years were given, it was just cash.