Tuesday, October 15, 2013

USPS Comes Up With Yet Another Way to Discourage Early Retirement

Please see the Postal Service's response to this article: USPS Responds To Criticism of Its Annuity Estimates.

Amidst all of the postal reform proposals that went nowhere the past few years, the one tactic that has definitely worked for the U.S. Postal Service is getting employees to retire early.

The tactic would work even better if the Postal Service stopped confusing or misleading potential retirees – by providing them with incomplete or just plain wrong information about what their retirement benefits will be.

Here’s the latest chapter in this sorry saga: In the most recent round of VERA (Voluntary Early Retirement) offers, many among the thousands of affected postmasters have received annuity estimates containing no calculation of what their monthly annuity payments will be, reports Roseanne Jefferson, a retired USPS benefits manager, in her Postal Retirement column.

Drop dead
She notes that the postmasters have to decide by “an irrevocable drop dead date” whether to retire without knowing what their retirement income will be.

“Who does that?!" she asks. "Who retires not knowing how much EVEN the gross annuity is, even before any deductions are made? Seriously….do you apply for a job, get the job, and then go home and tell your spouse, hey honey, I got a job…and the spouse says….GREAT!!!, how much will you be making….and the newly employed spouse says, gee I don't know, I guess I will find out when I get my paycheck.”

“The Postal Service has done NOTHING to improve their FERS [Federal Employee Retirement System] annuity estimates,” says Don Cheney, who has been working on USPS early-retirement issues for a decade, often on behalf of fellow APWU members. “They still don’t include the FERS Annuity Supplement when it is applicable."

Confusion is rampant
"Employees don’t know when they are eligible for the FERS Annuity Supplement or how much it is,” Cheney adds. “The rules in FERS are complex, unlike the old CSRS [Civil Service] Retirement System. Confusion is rampant, because local personnel offices were abolished in 2007” when the work was contracted out.

The Postal Service’s practices violate the Office of Personnel Management (OPM) instructions, Cheney claims.In a list of annuity estimates an employing agency must provide upon request, OPM’s handbook provides this instruction (in Section 40A2.1-3, pp. 20-21): “For FERS employees eligible to receive an annuity supplement, estimate the monthly amount payable to age 62.”

The case of the missing annuity estimates is just another chapter in a story that has been unfolding for years. In 2009, for example, only 3% of the 150,000 employees offered a VERA accepted, partly because many mistakenly thought they would be subject to a penalty.

Those eligible for a VERA frequently receive FERS annuity estimates that understate their annuity payments by more than $1,000 per month. And at times many postal retirees have had to wait seven to nine months to receive their full retirement payments.

No winners
No one wins when such incompetence discourages employees from retiring. Certainly not the Postal Service, which is desperate to reduce expenses in light of declining revenues. And with half of the postal workforce being 50 or older, plenty of employees are eager to leave if they could just be sure what their retirement income will be.

By enabling USPS to replace long-time employees with lower-paid new hires and to eliminate jobs without violating no-layoff clauses, the various early-retirement drives are probably saving the Postal Service billions of dollars annually.

Just think how much greater the savings would be if the Postal Service could just do what is commonplace among large businesses – provide accurate and timely retirement information to its employees.

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Anonymous said...

The information is there, I've been watching the retirement videos for years now! I went on postalease just the other day and looked at my retirement estaments. Really, why wait for the post office to give you the information, go get it yourself, I did!!!

Anonymous said...

The Dead Tree Edition, has been a true beacon of truth for what is really happening in the postal service. It has also been a great friend to all the postal workers over their many years of reporting. Thank you!

Anonymous said...

Please offer letter carriers a chance at a VERA. Older carriers were hired to deliver service, but recent years that is all but gone to make way for made up numbers to give upper mgt more bonus cha-ching. The savings would be instant. Offer a 25k incentive, and you would still save money after the first year with a CCA.

Anonymous said...

I was fortunate enough to be able to meet with Roseanne Jefferson when considering retirement. If not for her, I would still be working and not enjoying the freedom that retirement(2 yrs.)
has given me. You need to find someone who is competent enough to provide you with the correct info and Roseanne did that for me. Don't wait for a buyout, get on with and enjoy your remaining years.

Anonymous said...

I left in May after 30 years under CSRS and have not missed the place one minute the whole key to getting out when you want is to save save save only then will you have freedom from the number crunchers

Anonymous said...

I read the Dead Tree Edition when I can and SOME information is helpful. Bashing the USPS constantly is not helpful at all. This story about Discourage Early Retirement is very misleading! Why would anyone wait to see what is on their USPS printout? Postalease is there and EVERYONE has access to it. If you have to be spoonfed on your information, maybe you should'nt retire. It's all about preparation on your part. Enough said...

Anonymous said...

I would have to agree with anonymous,any half decent offer would empty out what's left of the csrs carriers.Mine is an older station,lots of 25+ yr people,and we would leave almost enmasse if a credible offer were given.

Anonymous said...

USPS needs 3 more VP's in charge of their retirement section

Anonymous said...

People need to start being pro-active and stop expecting someone to knock on their door and offer to explain their retirement benefits to them. You can get lots of information about FERS on OPM.gov. Also, USPS has a great, easy to use website for employees to gain information about their retirement estimates. I work for another gov't agency and it's like finding a needle in a haystack to use our website to get info. My husband is a postal employee and I was amazed when I saw how good postal employees have it when it comes to managing their personnel issues online. Also at OPM.gov you can order publications with information about FERS retirement benefits. (When the gov't shutdown is over...........)

Anonymous said...

there will never be an incentive for carriers. It is the one position in the USPS that they are short of employees. They can not and will not be able to effectively replace thousands of carriers. In addition, although all unions have been weakened the carrier union is the weakest by far.

Anonymous said...

It's like Obamacare just vote it into law and you can see whats in it. The new American way.

David Cary said...

While carriers are, indeed, the position where the USPS needs people the most, I think it would be wise for management to offer a VER to them in order to make positions available for the other craft employees who are having to quit, relocate, or take a less desirable job.

It seems it would be a win/win offer.

But unless the Postal Service gets serious and offers the legal limit of 25,000 there will be relatively few that take it, especially since the past buyouts have been split in two annual payments, and not even immediate, which would help many pay off some obligations and tide over until the first monthly check finally arrives.

Anonymous said...

I retired Nov 2 2012. Signed the paper work on my 55 birthday, left less then 3 months later. Never looked back. Even feel bad now i'm on this site. I go here very little because I have the p.o. out of my system. If your waiting for a buy out you really don't want to leave or cannot afford too. I just spent my summer in Yellowstone National Park, doing what I wanted to do. That's what retirement is about. Have a plan and go with it. Loving life again.

Anonymous said...

Sorry Mr. Cary but the federal emp. limit is 25,000 but the post office only is 20,000 which was offered to postmasters. What do you think they are going to offer you? The same as them, not hardly, so look it up and you'll find that we are not treated like other federal emp. because we are a separate independent part of the federal govt.

Anonymous said...

Makes WAY to much sense to offer retirement incentives to older carriers. It also rids the USPS of the CSRS people. But that is exactly why it won't happen. Something the P.O. has NONE of....COMMON SENSE!

USPS Corporate Communications said...

According to OPM’s audit results, the U.S. Postal Service leads all agencies in retirement application accuracy with a score of 97% for its August 2013 submissions.

Through our partnership with OPM Retirement and the National Personnel Records Center, the Postal Service has worked diligently to provide accurate and timely information, which reduced the backlog at OPM from a 7- to 10-month delay to currently 30 days or less before retirees are placed in interim payment status.

The Postal Service recently sent offers to approximately 16,000 Voluntary Early Retirement (VER) eligible employees; twelve employees reported receiving blank annuity estimates due to a processing issue. These employees were immediately provided a revised annuity estimate.

The Postal Service provides its employees with annuity estimates that display the estimated annuity amount for employees with and without a survivor annuity. It also provides the following information listed below on its annuity estimate:

 Retirement eligibility date
 Annuity computation date
 High-3 average salary
 Total actual service
 Accrued sick leave credit
o 50% for FERS retirements effective through 12/31/2013
o 100% for FERS retirements effective on or after 01/01/2014
o 100% for all CSRS retirements
 Annual leave earned balance
 Terminal leave payment
 Cost of life insurance and FEHB coverage in retirement

The annuity estimate is based on up-to-date individual employee data and a comprehensive, validated service history for each employee, determined according to CSRS and FERS regulations. The service history identifies not only Postal Service service but also periods of military and prior civilian service and whether those periods of service are creditable for retirement eligibility and/or annuity computation.

OPM has validated Postal Service results as highly accurate as compared to actual OPM annuity determinations. The process is continually updated to reflect changes in retirement regulations; for example, estimates reflect the creditability of sick leave for the FERS annuity computation and the ability to make FERS redeposits.

The Postal Service does not provide annuity estimates for the FERS Special Retirement Supplement at this time -- the FERS Special Retirement Supplement is based on an OPM calculation of FERS service as a portion of 40 years of estimated Social Security earnings -- but we are currently working with our Supply Management office to find suppliers capable of leveraging their retirement software applications with our retirement applications to provide an estimated numeric value of the Special Retirement Supplement amount. We anticipate that this project will be completed this fiscal year. In the meantime, the Postal Service does provide a formula on the annuity estimate that shows the employee how to calculate the estimated amount of the Special Retirement Supplement using their own Social Security earnings.

We greatly value the service of all our employees, and we endeavor to do everything we can to contribute to a rewarding retirement.

Anonymous said...

I've got 26 yrs I'm under FERS, I just want them to not penalize me if I leave early. I'm 50 and would go now if they gave me my full pension w/benefit on my 56 birthday separation date. Believe it or not there are a few carriers that could find another job less physically demanding for 5-6 yrs, sure a small percentage, but their leaving wouldn't hurt like an massive VERA. The money for the pension is already banked my supplemental SS would be lower but my health benefits in retirement wouldn't be lost.

Anonymous said...

Unless they offer an incentive, i.e., $$$, then there will be few takers

kingofthecastle said...

I've been out a year already and I'm loving it! No more forced overtime, blatant contract violations, out of schedule, switched days off, start time and end times adjusted blah blah blah. Myself and my spouse put a lot of thought and planning into my decision. Ask questions, make phone calls, send emails. Definitely ask questions outside of your installation and if possible your district. Do not rely on local managers to give you information. Plan plan plan and save save save!! In the end I was able to use my AL and SL. I beat them at their own game. I won. I was able to leave on my terms, not theirs. To those still out there, be strong and vigilant. Good luck!

Anonymous said...

Want to save the Postal Service? Do away with bulk-rate and "presorted first class" mail. Make the junk mailers pay full fare, instead of riding for free and being subsidized by your mailed electric bill and letters to Grandma.

Either they'll vastly increase USPS's revenues or they'll get out of the junk mail business. Either way it's win-win-win for everybody. Except the junk mailers, but who cares about them?