Post office suspends retirement contributions : News-Record.com : Greensboro & the Triad's most trusted source for local news and analysis

WASHINGTON (AP) — The financially troubled Postal Service is suspending its employer contribution to the Federal Employee Retirement System.

The agency said Wednesday it is acting to conserve cash as it continues to lose money. It was $8 billion in the red last year because of the combined effects of the recession and the switch of much mail business to the Internet. It faces the possibility of running short of money by the end of this fiscal year in September.

"This move underscores the need for Congress to make bold, quick and substantive reforms to the Postal Service. The USPS is hanging by a thread, along with 8 million private sector jobs that depend on the mail," said Art Sackler, coordinator for the Coalition for a 21st Century Postal Service, a group representing the private sector mailing industry.

The post office said it has informed the Office of Personnel Management that the $115 million retirement payment made every two weeks will be suspended effective Friday. The action is expected to free about $800 million in the current fiscal year. The post office's FERS account currently has a surplus of $6.9 billion, the agency said.

Because of that surplus the suspension should not have any effect on current retirees, postal spokesman Dave Partenheimer said.

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.

retiree

June 22, 2011 - 1:50 pm EDT

What about all those postal workers who are not doing anything? A friend of mine works for the USPS and he says that while there has been some overtures for early retirement, there are still too many employees who aren't doing anything, sitting in rooms and reading the papers until they are needed, but USPS appears powerless to do anything about it. The USPS union is part of the problem since they bargained for specific work rules which hamstrings USPS to at least break even. Congress is also at fault since it bowed to the union and forbid UPS and FedEx from getting into the mail delivery business and they keep USPS afloat with infusions of cash every dew years. Next time you hear those who say where else can you send a letter across country for 44 cents in a couple of days, then ask them why they are always operating in a decifit?

Panacea

June 22, 2011 - 4:59 pm EDT

The Constitution has long been interpreted to give the USPS a monopoly on mail service, with few exceptions.

Those exceptions (express mail) are very expensive from Fed Ex and UPS.

Allowing competition would result in wildly fluctuating prices for mail delivery . . . and it would hurt other industries becasue their delivery costs would become unpredictable.

It's a bad idea.

rmacz

June 22, 2011 - 6:42 pm EDT

So you're saying....Milk the tax payers at a lost?

June 22, 2011 - 10:33 pm EDT

What you are describing is a subsidy for a service that has outlived its usefulness. Yes, there are some elderly people who want to get their mail in their mail box, but they ought to be able to pay a good bit more than 44 cents for a letter. Plus, the mass mailing industry lobbies Congress to keep the rates low so they can ship their inane paper to our doorsteps. I say enough is enough.

gatecitycanes

June 22, 2011 - 2:26 pm EDT

Yet another liberal government entitlement program that has failed miserably. Close the US Post Office, put these fat-cat union workers on the street and turn mail delivery over to the private sector. I'm sick and tired of government in my life and my mail.

The USPS is part of the Constitution. You recall the Constitution, do you not? Article 1, section 8, clause 3.

June 22, 2011 - 10:34 pm EDT

Remember, that part of the Constitution was written over 200 years ago when a letter took weeks to get to you. In today's world, they need to innovate and not rely on what worked in 1776.

Theo

June 23, 2011 - 12:12 am EDT

It's clause 7...and it just allows us to establish a Post office & post roads.

Dman94

June 22, 2011 - 5:41 pm EDT

Yeah gatecitycanes, why not close the USPS? Then we can have several hundred thousand more UNEMPLOYED people for you to compain about! You know, those people receiving unemployment benefits, possibly food stamps, etc.! That is a real smart idea! Why not just close down ALL government offices. Let's start with the fat cats who sit in the halls of Congress and those wealthy employee's they have in Washington!

June 22, 2011 - 10:35 pm EDT

Unemployment and food stamps would still be less than their salaries and benefits, so we'd save more.

June 23, 2011 - 12:15 am EDT

It's just better to keep losing money?....because we can just print more.

whyus

June 22, 2011 - 2:34 pm EDT

While they are at it, someone independent of the USPS should do an audit of all of their benefits and get rid of some other giveaways. I am surprised though that they just didn't raise their rates again to cover their mismanagement.

pragmatist

June 22, 2011 - 3:29 pm EDT

"Another liberal government entitlement program that has failed miserably". " Note to genius named "gatecitycanes": the Postal Service was established by the Constitution. If you have a problem with the Constitution, that's your problem, not the postal service's. It has operated non-stop for over 230 years, making it one of the most successful businesses in world history and IS the second largest American employer, right after WalMart. As an independent agency that operates by its own revenue, it receives no taxpayer money. As for its being "liberal", It was re-organized by decidedly non-liberal President Nixon in 1971. And, by the way, if you think a retirement fund with a multi-billion dollar surplus means it has "failed miserably", maybe you take an economics course. You can probably get information about one by mail.

CarolinaBorn

June 22, 2011 - 7:32 pm EDT

...and if you think that the USPS is "one of the most successful business in world history", I'd advise you be the next one in line for that economics class.

June 22, 2011 - 8:03 pm EDT

You should take your own advice, CarolinaBorn: "If you do no have a couple of Master's degrees your not entitled to comment on anything. That's reserved for others."
By the way, judging from your spelling and grammar, you should take a few remedial English lessons before you try economics.

June 22, 2011 - 10:38 pm EDT

You know when someone's arguments are weak when they resort to attacking the person and their style of writing.

wctbl?

June 23, 2011 - 8:43 am EDT

I respectfully disagree. Spelling and grammar are good indicators of cohesive thought and enhance the reader's comprehension. Everyone makes some mistakes, but repeated daily errors indicate a lack of respect to the reader and thus the forum.

June 22, 2011 - 11:04 pm EDT

If that's how you defend your own statement....ok.

My own advice? I don't have a masters; if you took the time to quote be, make sure it's in context.

dont tread on me

June 23, 2011 - 7:04 am EDT

If Prag resorts to personal attacks as opposed to intelligently responding to his/her original point, I'd say that's the same as admitting your wrong to begin with.

Mr. JMS

June 22, 2011 - 9:18 pm EDT

" It has operated non-stop for over 230 years, making it one of the most successful businesses in world history "
It's pretty easy when you have a monopoly.

June 23, 2011 - 12:25 am EDT

Pragmatist is funny to me!

Walmart had net sales of 112 billion the 4Q of 2010 and the USPS is 8 billion in the Red.

June 22, 2011 - 4:43 pm EDT

Pragamtist mentions two very important things about the USPS. It is the second largest employer after WalMart. And it has been in business over 230 years. Being in business over 230 years doesn't make success when it is build on increasing postal costs to consumers. Also, WalMart is a success as it is accountable to it's shareholders and makes money by attempting to reduce costs to consumers through volume, not increase costs.

June 22, 2011 - 5:05 pm EDT

Walmart is a success because they are able to control their supply costs, and encourage people to mob into their stores, not because it is accountable to shareholders. Many private corporations that do not sell stock are quite successful.

Let's face facts: 44 cents to mail a first class letter is dirt cheap. You couldn't get UPS or Fed Ex to handle mail for that price.

The USPS needs to raise postage rates, and every 1 or 2 cent rate is met with controversy and opposition with the public forgetting what the true cost of delivery really is.

Or, the USPS could end Saturday delivery (neither Fed Ex or UPS delivery on weekends for the most part), and save big.

Here's a consideration most have not considered: the USPS has its own law enforcement branch that investigates and enforces the mail fraud and dangerous substances in the mail laws.

Scammers would have an open license to steal without the Post Office.

oh good grief

June 22, 2011 - 8:14 pm EDT

Panacea said: "Here's a consideration most have not considered: the USPS has its own law enforcement branch that investigates and enforces the mail fraud and dangerous substances in the mail laws. Scammers would have an open license to steal without the Post Office."

And, wrongdoers employed by the USPS face a Federal Court trial and punishment meted out by the same Federal Court. I saw some of the trials of USPS employees in Federal Court. I'll say one thing, the upstanding, law-abiding" employees of the USPS don't balk or play softball while being witnesses for the prosecution in those trials.

I don't want my mail delivered by any other entities unless those entities and their employees would fall under the jurisdiction of Federal Courts.

June 23, 2011 - 12:27 am EDT

You are clueless!

June 22, 2011 - 5:45 pm EDT

The way Wal-Mart is a success is that it does INCREASE cost by REDUCING the size of a product! Check it out sometime when in a store! This has been happening for at least eight years (if not longer)! So, that is a totally and completely INVALID comment!

June 22, 2011 - 9:25 pm EDT

"Wal-Mart is a success is that it does INCREASE cost by REDUCING the size of a product! "
That's no different than any other company. When was the last time you bought a 1/2 gallon of ice cream?
And obviously Walmart is still a good value to many. Just look at their parking lot. That's call Free Enterprise.

June 22, 2011 - 10:42 pm EDT

Macaroni Grill started doing something like that about a year or so ago . . .giving you a smaller portion than they used to provide and increasing the price . . . the waitress said it was a new "healthy portion." I said they were cheap and told her I wouldn't be back even though I liked their food. I voted with my feet, and my wallet.

billhpt200909

June 22, 2011 - 9:17 pm EDT

For the record, I am a current USPS employee in craft and a union member. USPS delivers mail throughout this country at one of the lowest, if not the lowest cost, of all the post office organizations worldwide. USPS is the only organization in this country which delivers to every address in the US & its territories (Guam, Puerto Rico and others) six days a week. UPS & FedEx do not do that. In fact, UPS & FedEx use USPS to deliver many of their packages the final miles since USPS' rates are below their cost to deliver the parcels themselves. While there are many inefficiencies in USPS which also exist in every other company including WalMart etc, fixing all of them would not instantly fix USPS or magically lower postage rates. The Unions did fight for work rules and other protections which were mutually agreed to by USPS management. Those rules do help protect employees from mandated work up to 60 hours per week without overtime pay, denial of sick pay, and other things many private sector employees take for granted. Those union contracts were freely negotiated by labor & management. They were not coerced. Federal employees, including all Postal employees, are legally forbidden from striking. Anybody remember the Air Traffic Controllers? They struck and were fired. Contract talks without mutual agreement are settled by binding arbitration, a process which takes years. As this newspaper's article correctly noted USPS has been required to PRE-FUND its retirement obligations unlike any other Federal agency. The amounts that USPS has been made to pay above and beyond the correct amounts range from 50 - 75 billion dollars. These costs have had a HUGE impact on USPS' ability to function especially in these challenging times. As for "fat retirement plans," USPS contributes 1% to an employee's retirement fund and will match additional employee contributions up to 5% of annual pay. That's it. Civil Service pensions were abolished decades ago. Finally, as a Federal employee, I took an oath of allegiance to the United States Constitution and to the Postal Service. I am proud to do my best as are many of the people I work with everyday. It's easy to say all Postal Workers are just "sitting around, reading the paper, and goofing off." That is not true. Letters Carriers work hard every day under very demanding conditions. People in processing plants work 24/7 everyday of the year including all holidays, yes even Christmas and the Fourth of July. So before you blast out calling us massive drains on society, please be sure of your facts. I believe it is important to reform USPS to be as efficient as it possibly can be. "Privatizing" universal mail delivery service will be more expensive if done by "for-profit" companies and/or service will NOT be universal. I believe a wholesale sell off or shutdown of the US Postal Service will hurt this country and our economy.

June 23, 2011 - 12:29 am EDT

You lost me at Union!

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