Future Postal, Federal Workers To Pay More for Retirement Benefits

A proposed budget deal announced late on Dec. 10 would require postal and federal workers hired after Dec. 31, 2013, to pay more toward their retirement benefits. The increase would not apply to employees who are already on the rolls and would not affect current retirees.

The deal would require employees hired after Dec. 31 to contribute 4.4 percent of their salary into the Federal Employees Retirement System, well above the 0.8 percent that most postal and federal workers pay. (Employee payments were increased as part of previous budget negotiations to 3.1 percent for workers hired after Dec. 31, 2012.)

Just the day before the deal was announced media reports said the proposal was expected to affect current workers as well as future employees.

A coalition of 31 postal and federal unions and management associations, including the APWU, blasted the proposal. “The proposal would effectively cut the take-home pay of federal employees,” the coalition wrote in a letter to budget negotiators on Dec. 9. “This is simply unacceptable.”

“The coalition’s efforts may have had an effect,” said Legislative and Political Director John Marcotte. “They may have helped persuade negotiators to limit the increase in employee contributions to new hires.

“But the budget deal is still an assault on our future brothers and sisters and on military veterans,” he said. The proposal would reduce cost-of-living adjustments (COLAs) for military retirees by tying adjustments to the inflation rate minus one percent.

APWU President Mark Dimondstein also condemned the plan to increase payments from future employees. “It is outrageous that postal and federal workers — even future postal and federal workers — are bearing the brunt of austerity measures. This is something we will work to fix.”

“The same politicians who refuse to compel corporations and wealthy individuals to pay their fair share are willing to solve the nation’s deficit on the backs of working people,” he said.

Republicans also refused to include an extension of unemployment benefits in the budget agreement.

Saturday Delivery Spared

The budget negotiators also seem to have spared Saturday mail delivery. Postal unions were concerned by reports that they were considering proposals to eliminate the sixth delivery day. In a separate letter to congressional leaders Dimondstein said such proposals would “weaken the U.S. Postal Service, eliminate tens of thousands of jobs, and derail the agency’s fledgling recovery.”

“As you know, the Postal Service does not contribute to the deficit, receives no taxpayer money, and has recently shown an operating surplus,” he wrote.

“Congress can best support the USPS by eliminating the mandate of the Postal Accountability and Enhancement Act of 2006, which requires the USPS to pre-fund healthcare benefits for future retirees — a burden no other government agency or private company bears. To strengthen the USPS, Congress also must protect service standards and allow the USPS to offer new services that will create new sources of revenue,” he said.

APWU members should be alert for any future budget maneuvers that could postal and federal employees, Dimondstein said after the deal was announced. “We will keep our members informed.”