The U.S. Postal Service has just announced they will suspend payments to their employee retirement fund beginning this Friday. Eight hundred million dollars will be saved for the current fiscal year (which I think ends in September). OMGosh, you’ll want to see the video below – has to do with “million dollar homes” for transferred postal employees.
The Federal Employee Retirement System has a surplus of $6.9 BILLION. A spokesman says there will be no effect on current retirees.
He said no decision has been made about how long the contributions will be suspended but “it is not a long-term solution. The long-term solution is getting legislation passed.”
Anthony Vegliante, chief human resources officer, said the post office will continue to send employees’ contributions to the retirement system, as well as employer and employee contributions to the workers’ savings plans, which are similar to a 401(k).
Over the last four years the Postal Service has cut its staff by 110,000 and reduced costs by $12 billion. The agency has also proposed eliminating delivery on Saturdays to save money and is working on closing small post offices and consolidating sorting and other operations.
The post office, unlike other federal agencies, is also required to make an annual payment of more than $5 billion as an advance contribution to future retiree medical costs.
Congress says the $800 MILLION in savings IS NOT ENOUGH – just a “drop in the bucket,” and it should be noted that the cut is not permanent, and no one is saying how long the program will last.
USPS does not receive taxpayer monies for operation. They rely solely on the services they sell. Senators Collins (R-Maine) and Tom Carper (D-DE) have introduced legislation to make further changes. Both Collins and Carper serve on The Senate Homeland Security Committee, and believes the USPS WILL NOT be able to MEET PAYROLL by the end of 2012, even with cutting 110,000 positions over the last four years, with another 7,500 jobs announced in March 2011.
So, when is the bailout, or delivery 3-day a week delivery?
Postmaster General John Potter stepped down in 2010, and that year he received $800,000 in salary and perks, that somehow morphed to a $5.5 MILLION total retirement package. His base salary climbed from $265,000 in 2008, from $186,000 in 2007. Potter received a “performance bonus of $135,000” but…the USPS had a $2.8 BILLION LOSS ($8.5 BILLION LOSS in 2010). Potter’s “bonus” was deferred until Potter’s resignation. After receiving the $79,000 raise in 2008, Potter froze “executive” salaries, however, in 2010 his base salary is listed as $273,296.
Congress has a House Committee on the Postal Service. They didn’t like the retirement package, and freshman Congressman, Jason Chaffetz (R-UT) vowed to investigate and “clean it up.” Nevertheless, Potter’s replacement, Patrick R. Donohoe has a similar compensation package.
Potter is also in line for a lump sum payment worth almost $244,000 for unused annual leave, may receive USPS-paid health insurance for a year and is eligible for up to two years of outplacement assistance, the 10-K report says.
I am not all that familiar with Human Resources – does “outplacement assistance,” mean helping finding a job, or receiving job training?
Two of the main postal unions received a 9.9% salary increase for the four years of 2006-2010 (salary of $52,747). That contract is up. In April 2011, a press release announced that neither side got what they really wanted, but a “tentative labor agreement” had been reached that will save $3.8 BILLION. You know what that means. Salaries went up. See postal worker salaries here.
In July 2010, Congressman Chaffetz introduced, and legislation was passed, to allow the Postmaster General to declare 12 holidays a year – an effort to cut expenses.
Post Office Buys $1 Million Homes for Transferrees (video)