RIF

Concerns have been raised by many DUO impacted Postmasters who received RIF notices last week. The following information was provided by Postal Service Headquarters officials: DUO General RIF Notices were mailed August 2; the Specific RIF Notices will be mailed August 31; the RIF effective date is November 4. All postmasters whose offices have been downgraded as a result of DUO and who have not been reassigned to another office will get a RIF assignment to their own downgraded office in their Specific RIF Notice, with the downgrade effective on November 5. Any RIF separations resulting from the DUO RIF will be effective November 4. Postmasters will not be separated but there could be an impacted supervisor and/or manager customer services as a result of the downgraded post office.

USPS Proposes Elimination of Layoff Protections

The following information was provided by USPS officials:

In order to eliminate the remaining 120,000 career positions by 2015, to restore the Postal Service to financial viability, it is imperative that we have the ability to reduce our workforce rapidly. Unfortunately, the collective bargaining agreements between the Postal Service and our unionized employees contain layoff restrictions that make it impossible to reduce the size of our workforce by the amount required by 2015. As explained below, it is not likely that the Postal Service will be able to eliminate these layoff protections through collective bargaining, given the nature of collective bargaining and interest arbitration. Therefore, a legislative change is needed to eliminate the layoff protections in our collective bargaining agreements.We recognize that asking Congress to eliminate the layoff protections in our collective bargaining agreements is an extraordinary request by the Postal Service, and we do not make this request lightly. Indeed, the Postal Service generally believes that it and its unions should be free from Congressional mandates as to the provisions of its collective bargaining agreements and that the Postal Service is best served when the bargaining parties can resolve their differences through collective bargaining. However, exceptional circumstances require exceptional remedies.

The Postal Service is facing dire economic challenges that threaten its very existence and, therefore, threaten the livelihoods of our employees and the businesses and employees in the broader postal industry and overall economy, of which the Postal Service continues to play a large part. If the Postal Service was a private sector business, it would have filed for bankruptcy and utilized the reorganization process to restructure its labor agreements to reflect the new financial reality. Because this option is not available to the Postal Service, we believe that this extraordinary request is a key to securing our future and our continuing ability to provide universal service to our nation.

Health Benefits and Retirement Plans

Information from a recent meeting that top USPS officials had with management and union presidents this week have stirred rumors about planned changes to health care and pension benefits for postal employees and retirees. Listed below are the actual discussion statements that were furnished by the Postal Service. I have italicized some of the key proposals that were discussed in the meeting, but not reported by some of the media.

Health Care

While the Postal Service would need the flexibility to design a health benefits program that is appropriate to the varying needs of its participants, fairness and practical considerations would guide how the Postal Service designs a plan for different groups of prospective participants. The Postal Service would have three distinct categories of participants in the Health Benefits Program and would seek to devise a tiered program uniquely tailored to each group.

First, for existing retirees, the Postal Service would continue to provide health benefits comparable to those offered by the most popular plan providers in the FEHB program, at equal or lower cost. However, as with current and future active employees, the Postal Service would seek to ensure that all Medicare-eligible annuitants and dependents fully utilize the Medicare benefits available to them.

Second, for current active employees, the Postal Service would, as a matter of fairness, benchmark against the leading FEHB plans, in an effort to maintain at the outset the existing benefit commitment through health benefit plans comparable in value and cost with those provided under FEHB. Initially, the Postal Service would capture cost savings by establishing a simpler, more cost-effective plan structure in line with private sector best practices. Moving forward, the Postal Service would pursue changes that bring the design of the program more fully in line with the private sector and adopt those changes that represent best practices that will benefit the Postal Service and participants alike. The Postal Service would also continue to bargain over the allocation of premium contributions between the Postal Service and its employees, after the initial establishment of the plan.

Finally, for new hires, the Postal Service would immediately establish a program that better reflects private sector trends than FEHB, including when those new employees retire.

Retirement

While the Postal Service would need the flexibility to design a retirement program that is appropriate to the varying needs of its participants, fairness and practical considerations would guide how the Postal Service would approach different groups of prospective participants. The Postal Service would have four distinct categories of participants in the retirement plan going forward and would propose a tiered program uniquely tailored to each group.

First, for existing annuitants, the Postal Service would continue the CSRS or FERS benefit levels consistent with the Federal Government plans, as a matter of fairness.

Second, for current employees who are CSRS eligible, and who are therefore likely to be near retirement, the Postal Service would maintain the existing benefit levels, except that future changes could be made to reflect broader changes to CSRS made by Congress, or to alter contribution levels or the cost-of-living adjustment (COLA) formulas from those set forth in CSRS.

Third, for current employees who are FERS participants, the Postal Service would distinguish by age. For those closer to retirement, the Postal Service would apply the same commitment as for CSRS participants. For employees who are not close to retirement, the Postal Service would not reduce any accrued benefits that have vested, but would reserve the right to make adjustments to benefits going forward, in consideration of federal sector changes to FERS, private sector comparisons, and the Postal Service’s own financial position.

Finally, for new hires, the Postal Service would immediately reflect private sector trends by offering a defined contribution plan only, which incorporates private sector best practices concerning employer contributions, portability, investment options, eligibility, designated providers, and overall administration.

This tiered approach reflects the Postal Service’s sensitivity and fairness to a participant’s length of service, proximity to retirement, and expectations as to retirement.

NAPUS Response

NAPUS fully recognizes the extraordinary financial difficulties confronting the Service, resulting from overpayments into the retirement system, overly-aggressive prefunding of retiree health coverage, and falling mail volume. However, the USPS proposal to deny its employees and retirees access to a stable, affordable, and time-tested earned health and retirement recklessly endangers the health and retirement security of all postal employees. Consequently, NAPUS urges Congress to reject the USPS proposal.

PRC Decision

Yesterday, the Postal Regulatory Commission issued a ruling on our complaint that certain provisions in the USPS’ March 31 proposed post office closing regulations violated current law. (While most of the provisions of the proposed regulations were implemented on July 14, none of the provisions that were subject to our complaint were implemented.) First, we argued that the regulations should not have been issued, absent a request for a PRC Advisory Opinion. Since the USPS requested such an advisory opinion on July 27, this part our complaint was settled. The other parts our complaint, were dismissed as being premature, since the USPS has yet to implement final regulations to “consolidate” a Post Office into a station or branch, without conducting a formal discontinuance process, and has yet to implement regulations to designate a postal employee other than a “Postmaster” as the manager-in-charge of a post office. However, the PRC made clear that it would reconsider our complaint, if and when the USPS implemented final regulations on post office consolidations and the definition of “Postmaster.”

For more on these and other recent breaking news stories, please click on President Rapoza’s Update and the Legislative News links on the NAPUS website.

Charlie Moser
NAPUS – August 12, 2011