NEW YORK STATE BRANCH
NATIONAL LEAGUE OF POSTMASTERS
CURRENT POSTMASTER ISSUES
Congress Approves FERS Sick-Leave Credit 10/23/2009
At long last! After a protracted campaign, postal and federal workers who retire under the Federal Employees Retirement System (FERS) will receive credit for sick leave when they retire. The new benefit was included among a number of pay and retirement provisions in a compromise version of the 2010 Defense Authorization bill, which the Senate approved 68-29 on Oct. 22.
The bill was approved in a House-Senate conference on Oct. 7, and the House adopted the measure the following day. The legislation will now be sent to President Obama, who is expected to sign it into law.
The bill includes a provision long-sought by the APWU and other organizations representing federal employees, which would allow FERS-covered workers to receive a 50 percent credit for unused sick leave until Dec. 31, 2013. Starting on Jan. 1, 2014, they would receive full credit. Employees covered by the Civil Service Retirement System (CSRS) already receive credit for sick leave when they retire.
"This is a great accomplishment," said APWU Legislative and Political Director Myke Reid. "We have always believed sick-leave credit for FERS employees is a matter of basic fairness."
The original legislation was written by Rep. Jim Moran (D-VA), who said the measure provided a financial incentive, because employees covered by the provision would avoid taking unnecessary time off toward the end of their careers.
The Defense bill — including the FERS benefit — was passed by the House on June 25, by a vote of 389-22. But the campaign for the sick-leave credit was dealt a setback a month later when an amendment granting the benefit was withdrawn at the insistence of Sen. Tom Coburn (R-OK), who threatened to filibuster. "Until this amendment is withdrawn, I will stay here, or I will have a colleague stay here, and we will talk about how this country is out of control in its spending," he said. "We’ve institutionalized sick leave. We’ve made it an entitlement."
Sen. Daniel Akaka (D-HI), the main sponsor of the amendment, agreed to withdraw it, but continued to defend the provision, saying, "This amendment will ensure that all federal employees are treated the same." Ten weeks after he withdrew the provision, Akaka was instrumental in getting it through the House-Senate conference committee, Reid said.
Rep. Edolphus Towns, (D-NY), the chairman of the House Oversight and Government Reform Committee, and Rep. Stephen Lynch (D-MA), chairman of the House Oversight and Government Reform Federal Workforce Subcommittee, were also key to the effort to convince conferees to include the sick-leave credit and other workforce provisions.
The compromise legislation also includes a provision that would make it easier for federal agencies, including the Postal Service, to rehire retirees (for a limited time) without forcing them to take a cut in their annuity checks. "This provision will help eliminate the USPS objections to APWU’s efforts to return postal retirees to employment," Burrus said. "If the bill is passed, the union will renew our discussion with management on this issue."
The bill also includes:
A provision that would allow employees who choose to work part-time toward the end of their careers to use a higher salary figure in calculations for how the reduced work factors into their retirement benefits.
A provision that would move workers in Hawaii, Alaska, the Virgin Islands and other U.S. territories from cost-of-living adjustments to a locality-pay system. [The territorial COLAs, as they are known, would be applied differently to postal employees than to other federal workers. The T-COLAs would not be taxed and would not be credited towards retirement; for other federal employees these earnings would be taxed and would be credited toward retirement.]
A provision that would allow FERS employees who left and then returned to government service to redeposit savings in the retirement system and earn credit for years they had previously worked.
March 4, 2010
Charles Mapa, President
Dear Leaguers,
The Big Day finally came with the Postal Service, under the leadership of Jack Potter, made the Big Announcement. The Big Announcement wasn’t not big in that any new ideas or concepts were presented, it was big in that the Postal Service had formulated the ideas into a plan. All of this was presented publicly on Tuesday morning at an event where hundreds of stakeholders and media were gathered in Washington DC. The agenda was well planned and carried out. After opening remarks by Board of Governors Chair, Louis Giuliano, in which he stated that the course on which the Postal Service is unsustainable, Mr. Potter then took center stage and was eloquent in presenting his case for the urgent need for change. Supported by a cast including representatives from two consulting groups, The Boston Consulting Group and McKinsey and Company, Mr. Giuliano, Deputy PMG Pat Donahoe, Board of Governors Vice Chair Thurgood Marshall Jr. and Robert Bernstock, President of Mailing and Shipping Services, Mr. Potter skillfully presented a picture of a Postal Service strapped by the requirement of prefunding future retirees’ health benefits, an expensive work force, declining volumes, a change in mail mix, the requirement of oversight by the Postal Regulatory Commission, restrictions in federal law, and a downed economy. All of these combined to help create a scenario, where if nothing else is done, the Postal Service stands to lose over $200 billion by the end of the year 2010.
Much time was spent is presenting a plan in which the Postal Service might be able to reduce its accumulated loss to zero, provided that it is somehow enabled to implement each strategy that is part of the big plan. These strategies included relieve from the obligation for the Postal Service to prefund future retirees’ health benefits (perhaps through capturing the $75 billion purported by the OIG to have been overpaid by the Postal Service into the Civil Service Retirement System), a move from 6 days to 5 day delivery, expanded postal access into drug stores, grocery stores, and office supply stores (which would allow the Postal Service to close retail operations and post offices), create a more flexible workforce, matching the pricing of our individual products more closely with their costs to process and deliver, file for an exigent rate increase, and loosen the oversight on the Postal Service. The plan was presented quite well and an optimistic, almost festive feel was in the air.
Following the presentation, a panel consisting of Potter, Donahoe, Bernstock, Giuliano, and Marshall answered questions fielded from the audience. Most of the answers were the expected ones, perhaps the most telling were two questions that were asked and not answered. The first was pretty straightforward; “What kinds of post offices are you looking to close?” Rather than answer the question, the panel went into a drawn out answer on how we will expand our access to customers. The second question asked, “ What will you do to reduce the layers of management?” The question seemed to be addressing the fact that we have a large headquarters operations, several area operations and 74 district operations. The panel answered that with a shrinking number of processing and delivery personnel, we’ll have need for fewer supervisors, and, as we move to more alternative access, we can reduce the need for Postmasters, presumably through closing post offices.
So, the die is cast. The Postal Service, banking on support from all postal employee groups, the mailing community, Congress and the American people, has set out on a course of change. Time is tight. The presentation of the plan has opened up more questions of how, where, when and why. We’ll see how much the Postal Service will actually listen to all of its stakeholders or just provide them lip service. The League was first out of the box this year in taking the case for relief from the obligation to prefund future retirees’ health benefits. It is obvious that the Postal Service will need the help and support of many entities to successfully fully implement its plan. We’ll see soon how much support is there.
Respectfully,
Charley Mapa
President, The LEAGUE
