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Huge new buyout offer at USPS

Oct. 7, 2012 - 08:58AM   |  
By SEAN REILLY   |   Comments
The latest buyout and early retirement offers could drive the largest single postal workforce exodus in two decades.
The latest buyout and early retirement offers could drive the largest single postal workforce exodus in two decades. (File photo / Getty Images)

When Kathryn Stranz learned last week that the U.S. Postal Service was delivering a long-awaited early retirement and buyout package, her reaction was instantaneous: “Yay!”

Stranz, an automation clerk in a Buffalo, N.Y., mail processing plant, was already planning to retire in 2014. But between uncertainty over the plant's future and the early retirement offer, the attraction of leaving much sooner was irresistible.

“I wanted to sing and dance, but I'm too old,” she said in a phone interview.

Other USPS employees voiced similar elation at the offer. The buyouts could drive the largest single postal workforce exodus in two decades.

“I can't wipe the smile off my face,” said Karen Anderson, a Los Angeles-area window clerk, who plans to retire after more than 33 years of service. “I feel like life is going to start over.”

The deal, which combines a $15,000 buyout with an early retirement package for longer-serving workers, is open to virtually all of the 187,700 clerks, drivers and other career employees represented by the American Postal Workers Union.

“I'm hoping for 20,000 [takers], plus or minus a few thousand,” Anthony Vegliante, the Postal Service's chief human resources officer, said in an interview.

Full-time employees must decide by Dec. 3 whether to accept the offer and then agree to leave by Jan. 31. The buyout money will come later in two installments: $10,000 on May 24 of next year and $5,000 on May 23, 2014. The lag allows the Postal Service to “self-fund” the incentive with money saved from the salaries of employees who leave and are not replaced, Vegliante said.

Part-timers can receive a pro-rated share of the $15,000 based on the number of hours worked in the preceding year. They have until Jan. 4 to make a decision, with a Feb. 28 departure date.

APWU President Cliff Guffey was not available for an interview last week, but he said in a news release that the deal will both benefit employees ready to end their careers and open up jobs closer to home for workers who face long commutes to keep working for the Postal Service.

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Of the pool of eligible employees, about 115,000 — or more than 60 percent — can retire now or qualify for the early retirement package, which allows workers to retire if they are at least 50 years old with a minimum of 20 years' service or any age with at least 25 years' service.

For the financially strapped Postal Service, whose unionized employees enjoy tough no-layoff protections, early-out packages have become an essential tool for tailoring its workforce to match a declining workload.

Nearly 3,000 mail handlers accepted $15,000 buyouts to retire or quit by the end of August, while about 4,200 postmasters have left in the last few months with the encouragement of a $20,000 incentive. No more early-out packages are planned for this year, Vegliante said, although next year is a “maybe.” Vegliante added Tuesday, however, that no buyouts will be offered next year and the chances for an early retirement package for any group of postal employees will hinge on circumstances.

Vegliante said the last time the Postal Service offered as wide-ranging series of early-out offers as this was in 1992, when the agency dangled incentives “pretty much across the board.”

The latest offer is similar to a 2009 package aimed at a larger group of employees represented both by the APWU and the National Postal Mail Handlers Union that drew 18,000 applicants. Since then, however, the Postal Service's financial plight has worsened, more employees have become retirement-eligible, and the constant downsizing has whetted some workers' eagerness to leave.

Anderson, for example, considered and passed on the 2009 offer because she would have taken a 6 percent hit to her Civil Service Retirement System pension. The impact will be far less this time because she's almost 55, the minimum age for CSRS retirement for someone with at least 30 years of service, she said, but on-the-job conditions are “probably the No. 1 factor” behind her decision.

“They just keep getting rid of positions and everyone else is having to absorb the work,” Anderson said.

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Workplace weariness also pushed Stranz, a 28-year USPS veteran, past her tipping point. She works the graveyard shift at the Buffalo plant, which is set to close in 2014. While Stranz could keep a job with the Postal Service, it could mean a 120-mile round-trip commute to the next-closest processing plant, in Rochester, N.Y.

“Physically, I've had enough,” she said. “I just think the whole environment of the job has changed.”

Other employees, however, will be taking the buyout as a welcome extra for previously laid plans.

For Dan Williamson, a Phoenix-area clerk who had his sights set on retirement, the $15,000 is “kind of a bonus.”

Bill McDevitt, a clerk in Lowell, Mass., was planning to retire in January. The money, he said, is “a little thank-you gift.”

Vegliante, however, disputed the suggestion that the Postal Service will mostly be paying employees to follow through on what they already intended to do. Typically, about 9,000 APWU-represented workers leave or retire each year, he said. The early-out package “will maybe double it,” he said.

For Bernadette Belisle, a clerk in eastern North Carolina with 24 years' service, the math works out differently. The $15,000 payday is not worth the reduced pension, higher health insurance premiums and lost Thrift Savings Plan contributions that would follow if she opted to retire now, she said.

“It's just not enough,” she said. For the average clerk, $15,000 amounts to almost three months' gross pay.

Of the Postal Service's four unions, APWU represents the largest share of the workforce. Despite months of informal talks, a deal on the early-out package was snarled in a separate dispute over whether the Postal Service was fully living up to the terms of the contract ratified last year.

Although APWU announced agreements on employee seniority rights and several other issues with the Postal Service just before the early-out compact was announced, both Vegliante and a union spokeswoman said there was no connection.

In the meantime, frustration grew among APWU-represented employees eager to move on.

“It didn't have to be a lot of money, but they were just waiting for something,” said Jane Sells, president of the APWU local in the Tampa, Fla., area, who fielded members' queries for months.

When the news finally came last week, it blindsided Carolyn Thornton, despite her position as an APWU chief steward at an accounting service center in Minnesota. Thornton, a computer systems specialist, had filed retirement paperwork months earlier. Her final day on the job was Oct. 3. Nonetheless, under the agreement, she is eligible for the buyout.

“I felt so blessed,” she said.

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