The US Postal Service announced a monthly loss for February of $658 million, leading to a year-to-date loss of nearly $1.8 billion. At this point last year, the USPS had posted a loss of only $258 million. Various estimates have projected a year end loss of somewhere between $5 and $8 billion.
This staggering loss comes on the heels of the announcement in late March of the USPS's plans to to cut up to 3,000 management jobs throughout the country, and elimination of four of the 80 customer service districts. The service maintains a huge management structure relative to its labor force, and is known for being the most top heavy organization in the country.
Postmaster General John Potter is attempting to save his organization through the reduction of thousands of redundant positions, closing of facilities, filing for additional rate increases, and cutting one day of delivery per week. The elimination of 3,000 management positions is expected to only save $100 million, and will therefore have almost no effect on the bottom line. A rate increase is scheduled for May, but often such increases further depress mail volume.
Many employees consider the action on management positions to be nothing more than a large scale rearrangement of office chairs, as significant new positions will be opened, often at higher pay grades. This has long been the tactic of the Postal Service, and nothing is expected to change. Further, the ratio of supervisors to employees remains considerably higher than what would be acceptable in private industry, as evidenced by surveys at numerous postal facilities.
Headquarters seems to believe it's serious about saving the organization, but until radical policies are implemented, such as former PMG Marvin Runyon's examination of every position that doesn't touch the mail, nothing will change.
Meanwhile, panic is in the air as management employees begin to consider the possibility of losing jobs, or being forced to relocate to other parts of the country, as the RIF approaches this summer.
Next stop: Associate Offices.
02 April 2009
30 March 2009
Taking an early out on FERS? Forget it!
Here we go again. The US Postal Service is offering a second round of early retirements to as many as 150,000 employees, with the exception of some 'critical' maintenance positions. There will be no incentives to entice employees to get out.
Whether an employee is CSRS or FERS can make a huge difference on one's projected retirement income. FERS is roughly comparable to CSRS for a regular retirement, in fact if one has a stretch of luck with the TSP, it can generate significantly higher income than CSRS.
But during the first round of early outs in 2008, many FERS employees were shocked to find the huge disadvantage in early retirement under FERS.
Consider: the formula for a CSRS early out is roughly 2 percent of the average of the high three years, multiplied by the number of years of employment, minus 2 percent of the total for each year under the minimum retirement age.
FERS, on the other hand, is a disaster for those seeking an early retirement. First, the annuity portion is exactly one-half that of CSRS at 1 percent of the high three multiplied by the number of years of employment. In 2008, many employees were receiving estimates between $12,000 and $18,000 annually. The Social Security Supplement, which will approximate the SS benefits earned during your years of postal employment, won't even start until the employee hits the minimum retirement age. The formula for this SS benefit appears to be a mystery as we have yet to find anyone who can explain it. And what many consider the best benefit of all, the TSP, is accessible only upon reaching age 59-1/2 if one wants to avoid a 10 percent penalty...unless you decide to take it as an annuity. Remember, you'll need to pay taxes on any TSP amounts withdrawn after retirement. A regular retirement at the minimum retirement age allows complete access to the TSP account with no penalty.
There's one more problem with FERS: any sick leave you've accumulated on retirement has no value, and will be, in effect, donated back to the USPS when you leave. CSRS retirees can add this time to their retirement, and some are able to add an additional year, which represents an increase of 2 percent in their annual annuity. There is legislation pending to change this discriminatory sick leave policy, so hopefully in the future unused sick leave will have some value.
So it makes me wonder: WHO on FERS would ever retire on an early out? Only someone who has some other significant source of income outside of the USPS retirement system. Just be sure to attend a retirement seminar to get all the facts before making your final decision.
Whether an employee is CSRS or FERS can make a huge difference on one's projected retirement income. FERS is roughly comparable to CSRS for a regular retirement, in fact if one has a stretch of luck with the TSP, it can generate significantly higher income than CSRS.
But during the first round of early outs in 2008, many FERS employees were shocked to find the huge disadvantage in early retirement under FERS.
Consider: the formula for a CSRS early out is roughly 2 percent of the average of the high three years, multiplied by the number of years of employment, minus 2 percent of the total for each year under the minimum retirement age.
FERS, on the other hand, is a disaster for those seeking an early retirement. First, the annuity portion is exactly one-half that of CSRS at 1 percent of the high three multiplied by the number of years of employment. In 2008, many employees were receiving estimates between $12,000 and $18,000 annually. The Social Security Supplement, which will approximate the SS benefits earned during your years of postal employment, won't even start until the employee hits the minimum retirement age. The formula for this SS benefit appears to be a mystery as we have yet to find anyone who can explain it. And what many consider the best benefit of all, the TSP, is accessible only upon reaching age 59-1/2 if one wants to avoid a 10 percent penalty...unless you decide to take it as an annuity. Remember, you'll need to pay taxes on any TSP amounts withdrawn after retirement. A regular retirement at the minimum retirement age allows complete access to the TSP account with no penalty.
There's one more problem with FERS: any sick leave you've accumulated on retirement has no value, and will be, in effect, donated back to the USPS when you leave. CSRS retirees can add this time to their retirement, and some are able to add an additional year, which represents an increase of 2 percent in their annual annuity. There is legislation pending to change this discriminatory sick leave policy, so hopefully in the future unused sick leave will have some value.
So it makes me wonder: WHO on FERS would ever retire on an early out? Only someone who has some other significant source of income outside of the USPS retirement system. Just be sure to attend a retirement seminar to get all the facts before making your final decision.
29 March 2009
Subscribe to:
Posts (Atom)