USPS OIG Says Postal Executive Pay is A-OK
April 2010
You’ve read numerous news articles lately telling everyone that postal employees earn about $83k per year including benefits and that USPS, and the unions, should consider reducing the salaries of postal employees such as letter carriers, clerks, etc. However, according to a report conducted by the USPS Office of Inspector General (OIG) postal executive pay is just fine – postal executives do not earn too much income.
In their report the OIG says:
“The Postal Service complied with the compensation limits stated in the Postal Act of 2006.”
The OIG states that their report “presents the results of our audit of compensation paid or deferred officers.”
The last time we checked DEFERRED compensation is nothing more that an arrangement whereby a portion of an employee’s income is paid out at a date after that income is actually earned. Examples of deferred compensation would include pensions, retirement plans, and/or stock options. The benefit of most deferred compensation perquisites (perqs) is the deferral of tax on said compensation to the date at which the employee actually receives the income.
Under the Postal Act of 2006 these postal executives may be granted their deferred compensation after their employment with USPS ends or, as the report states, “in a year when the payment of previously deferred compensation does not exceed the cap. Title 39 does NOT limit the Postal Service from ‘devising’ and implementing deferred compensation provided it does not conflict with either the Federal Employees’ Retirement System or Civil Service Retirement System.”
According to the OIG, the Postal Act of 2006 imposed guidelines on total compensation paid to Postal Career Executive Schedule II employees, the Secretary of the Board of Governors, and the Inspector General. Compensation includes annual salary, merit lump sum payments, bonuses, and awards.
Under this provision, the total compensation payable to any employee is established at three levels:
1. Level I of the Executive Schedule or $196,700 for calendar year 2009.
2. With the approval of the Board, total annual compensation not to exceed the total annual compensation payable to the Vice President of the United States, or $227,300 for calendar year 2009.
3. For up to 12 officers or critical employees, compensation up to 120 percent of the total annual compensation payable to the Vice President of the United States, or $272,760 for calendar year 2009.
Additionally, Postal Service officers receive additional benefits and other perquisites (perqs) NOT subject to this compensation cap.
The OIG states “…while we reviewed deferred compensation as a part of the overall scope, it does not apply to compensation caps.”
The OIG report further states that “The passage of the Postal Act of 2006 amended Title 39, imposing guidelines on total compensation for the Postal Service. Under this provision, the total compensation payable to any employee is established at three levels.”
These three levels are:
1. No officer or employee may be paid compensation at a rate in excess of the rate for level I of the Executive Schedule. This limit was set at $196,700 for calendar year 2009.
2. With the approval of the Board the Postal Service MAY develop a program to AWARD a bonus or other reward in excess of the above compensation limit, as long as this does not cause the total annual compensation paid to the officer to exceed the total annual compensation payable to the Vice President of the United States as of the end of the calendar year in which the bonus or award is paid. In approving any such program, the Board must determine that the bonus or award is based on a performance appraisal system that makes meaningful distinctions based on relative performance. This total compensation limit was $227,300 for calendar year 2009.
3. The report states that the Board may allow up to 12 officers or employees of the Postal Service in critical senior executive or equivalent positions to be paid total annual compensation up to 120 percent of the total annual compensation payable to the Vice President of the United States as of the end of the calendar year in which such payment is received. This compensation limit was $272,760 for calendar year 2009.
This report also tells us that postal exeuctives, or other chosen employees, may receive additional benefits and other perqs that are NOT subject to the compensation cap. These perqs may come in the form of increased annual leave exchange hours, free financial counseling, free parking, life insurance, and health benefits. In addition to any or all of these perqs the Postmaster General receives driver and personal security services from the U.S. Postal Inspection Service. In certain limited cases, officers have contractual benefits in the form of deferred compensation. These contractual benefits are NOT generally subject to the compensation guidelines defined in the Postal Act of 2006.
While I agree that postal executives should be paid in accordance to their value to USPS operations and goals – I DO NOT agree that any income paid or payable to postal executives should be non-transparent such as is the case with deferred compensation and contractual benefits. Additionally, I do not see how nor why postal executive pay should be comparable to that of the Vice President of the United States – what is the reasoning behind this perq?
It also seems utterly strange to me that while perqs for postal executives may be passed along at free will and almost without limits, small tokens of appreciation for great service is limited to $20.00 or less from customers who would like to thank a postal employee for a job well done. Tell me…what’s wrong with that picture?
Can you just sit back and imagine the amount of deferred payments and other contractual perqs passed along by USPS to postal executives, and friends, every year? There may be millions of dollars to capture here if it wasn’t for the fact that the fox is guarding the henhouse.
Rick Owens
Postal Employee Network
www.PostalEmployeeNetwork.com
Copyright 2010 by Rick Owens – May not be reproduced without permission. You may link to this page and article.
Broadway,Va.needs a New PostMaster!! No wait a minute that office runs quiet well without one.Man alot of money could be saved if management would be cut.Why do you need to pay someone BIG bucks to look down others backs??Wake up America,this is what is wrong with most companies.JMU stacks management upon management and guess who pays the students.In my sons office supv.stand around gossiping while everyone else is expected to work.The one got her supv job because she was friends with the other supv.
Great article, Rick! Very informative – in fact, so much so that I’ve become enraged.
It seems that we have yet another cadre of cronies massaging one another’s tuches while the people who touch the mail are suffering.
Well, I guess that’s becoming the American way.
Eric
Time to wake up America-Once gone it will be hard to get it back1 You never miss something untill it is gone and then wonder -“What Happened?”
Mail delivery is supposed to be a service to the American public, which includes by definition taking a few minutes if necessary to listen to and converse with individual patrons. The public is not interested in how fast we can get our route done so we can carry a handoff from another route and return to office by the magical time of 5:00 pm before our LLV’s turn into pumpkins~! There are offices where the customers can only talk to their carrier if they walk with them down the street……so not to waste a precious minute or two! The USPS no longer provides service without restrictions………service is now provided at the level necessary so management can meet fairy-tale goals and receive their merit raises. Is it any wonder that we who face the public daily, encounter much hostility from the public, and management turns their heads away. They only see what they want to see and believe.
according to the city carriers union magazine there were 25 employees in washington in 2009 with “vice president” attached to their name that make a base pay of 170,000 each with 13 executives in washington that make at least that much with a total of around 7 million for 2009 and they want to cut saturday and 40,000 jobs nationwide we would be fine if they would just eliminate the 25 and 13 jobs in washington
Ricky Boy the friends are the Board of Governors and Congress. This is the Headquarters of the Invisible Empire (Rabid Cash Cow).