The U.S. Postal Service will offer another round of early retirements and buyouts to tens of thousands of employees — and, this time, it will provide financial incentives to encourage employees to accept.
Eligible employees who accept the offer by Sept. 25 will be offered a $10,000 payment during the first three months of fiscal 2010 — between Oct. 1 and Dec. 31 — and another $5,000 payment at the start of fiscal 2011. The Postal Service is hoping 30,000 employees accept the offer, which would mean a one-time cost to the Postal Service of up to $450 million. But postal managers say they expect to save $500 million in salary and benefits costs next year alone.
The offer will be extended to all employees represented by two unions, the American Postal Workers Union and the National Postal Mail Handlers Union. Postal managers describe the deal as an "agreement" negotiated with the presidents of those unions.
Yvonne Yoerger, a spokeswoman for the Postal Service, said employees represented by those unions who are not yet eligible for retirement can also take advantage of the incentive — if they're willing to resign from the Postal Service.
The Postal Service has made four previous rounds of early retirement offers since the beginning of 2008, but few employees have accepted. The last offer, extended to 147,937 employees earlier this year, was accepted by just 2,505 employees — less than 2 percent. The round before that, which concluded in February, was accepted by about 2.3 percent of eligible employees.
Union leaders and rank-and-file employees have repeatedly urged the Postal Service to offer financial incentives for early retirement.
"They're not going to accept it otherwise. … They can't find supplemental employment in this economy," said APWU president William Burrus in an interview earlier this month with Federal Times.
But postal management resisted the idea. In an interview earlier this year, Postmaster General John Potter said the Postal Service "could not afford" to offer incentives for early retirement.
The early retirement offer will not be extended to letter carriers represented by the National Association of Letter Carriers or the National Rural Letter Carriers Association. Postal managers say they can't ask thousands of letter carriers to retire and still serve their nationwide delivery network.
The offers are just the latest cost-cutting effort by an agency that is struggling to close a nearly $7 billion deficit. The Postal Service is on pace to cut more than 100 million work hours this year and is under a nationwide hiring freeze. It is also trying to close hundreds of underused facilities — post offices and processing facilities — across the country.