More than 20,000 U.S. Postal Service employees so far have signed up for the agency's latest early-out offer, an agency spokesman said last week. (File photo / Getty Images)
More than 20,000 U.S. Postal Service employees so far have signed up for the agency’s latest early-out offer, an agency spokesman said this week.
The offer, unveiled early last month, combines a $15,000 buyout with an early retirement package for longer-serving workers.
The deal is open to almost all of the 187,700 clerks, mechanics and other career employees represented by the American Postal Workers Union. Part-time employees are eligible for a prorated share of the buyout based on the number of hours worked in the past year.
The deadline for acceptance is Dec. 3. More employees could sign up to avoid a wave of mail processing plant closures and consolidations set to take place early next year, Postmaster General Pat Donahoe told reporters in a Nov. 15 conference call. Earlier this year, almost 4,200 postmasters took advantage of a $20,000 buyout deal, while about 3,000 mail handlers accepted a $15,000 offer.
In addition, the Postal Service made an early-retirement offer — without a financial sweetener — to more than 3,300 Executive and Administrative Schedule employees in September. Those who opt to leave must do so by the end of the year. The package 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. The decision deadline was Nov. 19; USPS spokesman Mark Saunders did not have data later in the week on how many had accepted.
The string of early-out deals come as the Postal Service seeks to drive down payroll in the face of unprecedented losses.
From fiscal 2000 through the end of September, the size of the career workforce plummeted by almost one-third, from 787,000 to 528,000. This fiscal year, USPS executives expect it to fall to 496,000, according to official projections. The forecast was released at the Nov. 15 meeting of the Postal Service’s Board of Governors in connection with the mail carrier’s final fiscal 2012 financial results, which reflected a record $15.9 billion loss. That was more than triple the $5.1 billion in red ink for fiscal 2011.
Seventy percent of the 2012 loss — $11.1 billion — stemmed from two large payments to prefund future retirees’ health benefits. By law, the agency is required to make annual payments of roughly $5.5 billion each into the retirees’ health care fund, but the required 2011 installment was delayed by Congress until this year, requiring the Postal Service to make two such payments in 2012. USPS defaulted on both. Also delivering a hit to the bottom line — at least on paper — was $2.4 billion in long-term workers’ compensation charges. By one measure, however, the mail carrier’s finances showed some improvement: Operating losses shrank from $2.7 billion in 2011 to $2.4 billion last year.
Although the Postal Service hit its $15 billion borrowing limit with the U.S. Treasury in late September, it expects to skirt through the rest of this fiscal year without a cash-flow crunch, Chief Financial Officer Joe Corbett told the board.
The Postal Service has repeatedly sought congressional relief from the retiree health care prepayments as part of a broader postal reform bill, but without success. While lawmakers began a lame-duck session Nov. 13, they have so far made no formal moves on postal legislation.
“We continue to do our part to grow revenue and reduce expenses by making our operations more efficient and by providing our customers with new and expanded services to meet their mailing and shipping needs,” Donahoe said in a statement.
As part of its plan to regain long-term financial stability, the Postal Service is also pressing lawmakers to authorize it to:
Create its own health care program for employees and retirees.
Decide its own delivery schedules, such as ending most Saturday delivery.
Streamline decisions to set postal prices and offer new products.
Instruct arbitrators reviewing labor contract impasses to consider the Postal Service’s financial condition when making decisions.
Redirect excess funds paid into the pension fund — the Federal Employees Retirement System — toward buyouts and other priorities.