Pension estimates the USPS provides to employees who are considering retirement now include an amount for the FERS (Federal Employees Retirement System) supplement, reports Don Cheney, an APWU official with a long history of helping fellow union members understand their retirement benefits. The Postal Service has not announced the change.
“According to the responses I’ve received on Facebook, numerous employees are getting the new FERS annuity estimates with the supplement amount listed,” Cheney says. He provided a sample statement from one employee who would receive more than $15,000 annually – nearly equal to her regular annuity.
“This means FERS employees [those hired after 1983] will finally feel comfortable retiring. The USPS may get a huge exodus,” Cheney predicted.
The supplement is meant to take the place of Social Security until USPS retirees turn 62, when actual Social Security payments kick in. Usually, a postal worker needs to be at least 55 with 30 years of service to qualify for the supplement. About 85,000 postal workers have 30 or more years of service.
As Dead Tree Edition has reported previously, ignorance of and uncertainty about the FERS supplement have hindered response to USPS early-retirement offers. In a VERA (Voluntary Early Retirement) campaign, the minimum years of service to receive a VERA supplement drops to 20.
That could have been a huge incentive for some employees to retire early -- except that they typically were not told how much the supplement would be, or even if they were eligible, until after they submitted their request to retire.
But the era of big VERAs seems to be over. Instead of having too many employees, the downsized Postal Service now struggles to handle the rising tide of package deliveries while keeping deliveries on time and overtime under control. And there don’t seem to be any major productivity improvements on the horizon that would make it easy to eliminate more positions.
In theory, retirements enable the Postal Service to save money by replacing high-paid career workers with part-timers who gets much lower pay and few benefits. But union contracts limit the number of such non-career employees.
And with the recent trends of low unemployment rates and rising part-time wages, the Postal Service has struggled to recruit and retain non-career workers, especially in markets that have a high cost of living.
“The shortage of clerks and carriers has reached a critical point in almost every post office,” Cheney said. “I expect a massive failure of service standards during the Christmas rush.”
Related articles:
The Hidden Benefit of Postal Service Retirement
8 Reasons USPS Productivity Is Declining: The Employees Speak Out
The Postal Service's Early-Retirement Snafu
