Wednesday, November 28, 2012

USPS Underestimates How Many Employees Will Take the Money and Run, Poll Says

The majority of voters in a Dead Tree Edition poll predict that more than 20,000 APWU members will accept incentives to quit.

Of the 1,577 votes in the poll that ended tonight, only 16% agreed with a postal executive's recent estimate that 16,000 to 20,000 of the 115,000 eligible employees would accept the buyout package. Nearly 62% of voters predicted a higher number.

But voters also concluded that the "in the range of 35,000" estimate from William Burrus, former APWU president, is too high. Only one-fifth of voters predicted that more than 30,000 members of the Postal Service's largest labor union would call it quits.

The buyout package includes $15,000 and, for many employees, an even more valuable opportunity to take Voluntary Early Retirement.

Dead Tree Edition estimates that, if successful, the buyout program could reduce the Postal Service's compensation costs by more than $1 billion annually. But USPS seems to be doing little to present the buyout package in the best light, for example sending thousands of employees inaccurately low estimates of their retirement benefits.

Ironically, the APWU, which stands to suffer a significant loss of dues income as a result of the buyouts, is doing more than USPS to clear up the confusion about retirement benefits that may dampen response to the offer.

For example, it sent out a bulletin today informing members about the FERS annuity supplement, about which the Postal Service has been mostly silent. And Burrus urged those considering retirement to "take the money and run" because the Postal Service is unlikely to offer them a similar incentive in the future.

Related articles:

Politicking Leads To Profitable October for USPS

Bolstered by election-related mailings, the U.S. Postal Service experienced something unusual in October -- profitability.

USPS released preliminary financial results late yesterday showing net income of $61 million last month, the first month of Fiscal Year 2013, versus a budgeted loss of $244 million and last year's loss of $139 million.

If not for a $467 million charge for prefunded retiree health benefits, the agency's net would have been $528 million -- a profit margin of more than 8% on revenues of $6.03 billion. Those prepayments have been likened to an interest-free loan to the federal treasury that are designed to obscure the true size of the federal budget deficit. (See Congress Hears the Truth About Postal Service Finances.)

The volume of Standard mail -- derided as "junk mail" by critics -- was up 16% over October 2011. Standard class revenue rose only 10%, evidence that the big volume increase was concentrated in the kind of low-priced mass mailings of letters used by political campaigns.

Also helping the bottom line was better productivity: The Postal Service delivered 9% more mail pieces than in October 2011 but needed only 3% more work hours to accomplish that.

Saturday, November 24, 2012

The Hidden Benefit of Postal Service Retirement

Question: When does $16,638 actually equal nearly $30,000?

Answer: When a U.S. Postal Service employee compares the retirement annuity the USPS says he will receive to the payments he will actually get. Ignorance of the additional payments has hindered employees from accepting early-retirement incentives that are so crucial to the Postal Service’s cost-cutting efforts.

Consider the case of “Joan”, an APWU member who is eligible for Voluntary Early Retirement (VERA) and a $15,000 incentive to quit as part of a major USPS downsizing effort. In early October, as part of the incentive program, USPS sent her a notice that her retirement annuity would be $16,638 annually.

After factoring in her other potential income sources, Joan at first decided she couldn’t afford to quit her $53,000-per-year job. But fortunately, she dug a little further and talked to experts in the arcane world of USPS retirement benefits.

An additional $13,000
That’s how Joan learned that if she took the VER she would be eligible for an additional “FERS annuity supplement” of $13,020 annually when she turns 56 in a few years, says Don Cheney, who for years has been helping fellow APWU members understand their various retirement benefits.

“With this new information, she is taking the VER,” Cheney says.

Monday, November 19, 2012

Congress Is Fixin' To Fix the Postal Service

Word is spreading of a bipartisan, bicameral effort among Congressional leaders to fix the U.S. Postal Service. Before anyone gets too excited, let's remember that "fix" can also mean:
  • Castrate or spay
  • Restore or repair
  • Kill and preserve a specimen so that it can be studied under a microscope
  • Give someone a dose of an illegal drug
  • Take revenge (as in, "I'll fix him!")
  • Arrange an outcome dishonestly, such as with a bribe or by stuffing a ballot box
  • Establish something in a way that prevents it from changing (such as a fixed rate)
I'm just sayin'.

Thursday, November 15, 2012

Response to Buyout Offer Better Than USPS Expected

Unless a lot of postal workers get cold feet in the next couple of weeks, more employees will accept a $15,000 incentive to quit than postal executives had expected.

About 20,000 APWU-represented employees have already signed up for the buyout, Federal Times quoted Postmaster General Patrick Donahoe as saying today. That's at the top end of the 15,000-to-20,000 expected range the U.S. Postal Service provided last month and then reiterated last week.

Those who have signed up can back out before the Dec. 3 decision deadline, Federal Times' Sean Reilly noted. But it seems unlikely that many who signed up so far in advance would have a change of heart. Among the early sign-ups are some who had decided months or even years ago to leave as soon as a buyout was offered.

Thousands of the approximately 115,000 eligible employees are probably still digging through the complexities of postal pensions, annuities, Thrift Savings Plan payouts, tax implications, payments for unused leave, etc. to decide whether to take the money and run. Thanks to the incomplete information and lack of guidance USPS provides to potential retirees, the more postal workers learn about their various retirement benefits the better retirement usually looks.

So expect the number of employees who take the buyout to exceed 20,000. By Dead Tree Edition's rough calculations, that means the buyout could end up reducing USPS costs by more than $1 billion annually.

A slight majority of voters in a Dead Tree Edition poll so far believe the USPS estimate is too low. As the number of votes reached passed 1,000 this evening, 52% predicted that more than 20,000 would take the buyout. And 20% predicted the number would be above 30,000. Current results, and the chance to cast your own vote, are near the top of the right-hand column.
For more information on the buyout offer, see:

Wednesday, November 14, 2012

New Poll: How Many Postal Workers Will Take the USPS/APWU Buyout Incentive?

Offering 115,000 APWU-represented employees $15,000 to quit will clearly be one of the best investments the U.S. Postal Service has ever made.

What's not clear is how big the investment and payback will be. In other words, how many eligible employees will take the buyout? Dead Tree Edition is asking its readers to make their own prediction (the poll is near the top of the right-hand column) on the early-out incentives that could yield $1 billion or more in annual savings.

When it announced the program a month ago, USPS said it expected 15,000 to 20,000 employees to participate.

Former APWU President William Burrus soon countered with his a much higher estimate -- "in the range of 35,000" -- and advised postal workers not to hold out for something better. (See Take the Money and Run, Burrus Tells Postal Workers.) But the Postal Service's chief human resources officer indicated recently that his estimate had hardly changed; it's now 16,000 to 20,000.

Eliminating a position held by a full-time career postal worker probably saves USPS at least $60,000 annually. And a new employee is likely to cost USPS only half of what a veteran career worker does, according to Burrus.

That means that if half of the early retirees are replaced, a total of 15,000 buyouts would save USPS nearly $700 million annually. But if 35,000 take the package, the savings could be nearly $1.6 billion.

Sunday, November 11, 2012

Superstorm Sandy's Seven Lessons About Print Media

Many readers in the mid-Atlantic region report a new appreciation for print media in the wake of Sandy’s mayhem. Among the observations they passed along are:
  1. The best photos are still created for print media. Iwan Baan rented a helicopter to capture the stunning image that graced the cover of New York magazine’s post-storm issue. No one goes to those kinds of lengths, or expense, to produce a photo that will only appear in digital media. 
  2. Print works just fine when the power is out. 
  3. Print’s battery doesn’t die. 
  4. If you own a printed product, you don’t need a wifi connection to access it. 

Wednesday, November 7, 2012

FSS Is Saving Big Bucks, USPS Claims

The troubled Flats Sequencing System is saving hundreds of millions of dollars annually, according to a U.S. Postal Service claim.

Based on information USPS filed recently in a lawsuit, the agency’s $1.3 billion FSS investment will pay for itself after barely three full years of operation.

“The Postal Service saves approximately $325,408 for each month of operation of each FSS machine,” USPS said in response to a lawsuit filed against it by the key FSS vendor, Northrop Grumman. “This is the monthly amount the Postal Service would have to pay employees to manually sort flats to delivery point sequence if the Postal Service did not use the FSS machine, minus the additional cost of operating the FSS machine.”

FSS was supposed to revolutionize the sorting of difficult-to-handle flat pieces like catalogs, magazines, and large envelopes. Mailers hoped the efficiency gains from automating mail sortation that was done by letter carriers would reduce pressure on the Postal Service to increase postal rates for flat mail, but now they fear that FSS isn't paying off. (See FSS Is Increasing USPS's Costs, Expert Says and FSS Machines Running Far Slower Than Planned.)

Because the 100 FSS machines were deployed an average of 12 months later than required by contract, USPS claims Northrop Grumman owes it $393.7 million for lost savings. USPS is seeking an additional $17 million from Northrop for other alleged breaches of contract, such as a lack of spare parts, error-plagued maintenance handbooks, and failure to honor warranty claims.