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
Is he talking about the same Supplement Trump has proposed to eliminate in his 2018 budget?
ReplyDeleteYes. The same supplement Obama tried to eliminate in his budget.
DeleteThere are always a lot of proposed laws and proposed budget changes flying around Capitol Hill. The only ones that get passed are the ones naming post offices.
ReplyDeleteWell too bad its not the USPS that approves the budget! Holy cow what passes for journalism these days. What a dangerously misleading story.
ReplyDeleteYes Obama's budget did propose elimination of the FERS supplement, but only for FUTURE new hires. Current employees would have been grandfathered in.
ReplyDeleteBig difference!
Two problems with this:
ReplyDelete1. Feds are talking about doing away with the FERS supplement.
2. VERA's are crap. For example - I have 30 years of service and am eligible for retirement in 5 years. They offer a VERA saying I can retire now. Means I get credit for 30 years, right? WRONG!!! They penalize me for retiring 5 years early and I ONLY get credit for 25 years. What a crock.
We lose money on EVERY piece of marketing mail. We give workshare and presort discounts for mail that is virtually non-machinable, with bad or NO barcodes, and management does nothing. 1st class letter mail, which is still our number one source of revenue @28%, suffers as a result.
Keep on selling your pipe dreams while our infrastructure and experienced workforce are damaged to the point where all we can do is be is be a profit mill for the bulk mail industry. This was the plan all along. 2006 PAEA gave them all the excuse they needed to twice reduce 1st class letter mail service standards, a crime according to U.S. Code Title 39 Section 101, as a 'solution'.
@ J SIMMONS.....your understanding of the rules that go along with
ReplyDeletea VERA appear to be way off base. your 5 year penalty example is just plain
wrong and NOT based on facts or reality. do a little research and post accurate
information as you might mislead others when you post such nonsense
ramblings.
I'm surprised it took so long to include the SRS estimate especially with so much confusion on the topic. Keep in mind the FERS supplement is paid directly (and automatically) by OPM - and not the SSA. In order to qualify, postal workers have to retire either under the MRA + 30 years of service OR Age 60 + 20 years. Very important to also note that MRA + 10 will not be eligible - as well as those retiring under disability. To calculate your SRS estimate, just take your projected SS benefit at age 62 (from your SS statement) and multiply it by your number of years of creditable FERS service and divide by 40. For me, this will be $1,595 times 33 years divided by 40 = $1,316/mo ($15,790/yr). For those who may get another job after retiring, keep in mind the SRS IS subject to the SS Earning Test. In case of VERA, the FERS supplement will not be paid UNTIL you reach your MRA. Quite a few postal workers I know keep working simply because they do not know all the facts. Providing the SRS information to eligible workers is a good move by USPS, but watch out for the voids in service and experience when older workers hit the door.
ReplyDelete