Postal Employees and Retirees See Threats to Pay and Benefits in White House Budget

The White House released its plans for the fiscal year 2020 budget this month. It once again attacks workers, calling for deep cuts to salaries, retirement and health benefits. It also echoes parts of the Postal Task Force December 2018 report that calls for the elimination of union negotiated collective bargaining rights over pay, creating a postal employee pay system similar to what is seen in the federal workforce.

Further mirroring the Postal Task Force report, the budget calls for privatization of the Postal Service in part, including outsourcing processing and sortation to private companies, and providing access to mailboxes to third parties.

“The cuts in the current White House budget proposal clearly come at the expense of postal employees, retirees, and the American people,” President Mark Dimondstein said. “Similar attacks on postal workers and universal postal service were also seen in the June 2018 report from the White House Office of Management and Budget (OMB) in which the White House proposes to sell the Postal Service to the highest corporate bidder.”

“APWU members must remain vigilant, organized and unified in defense of the public Postal Service and the rights of postal workers,” President Dimondstein continued.

 In addition, the budget also attacks our wages and benefits through:

• ‘High Three’ to a ‘High Five’

The White House budget recommends basing retirement annuities on the average highest five years of salary instead of the current high three, resulting in a decreased annuity payment.

• Changes to COLAs for FERS and CSRS Retirees

Postal retirees under the Federal Employee Retirement System (FERS) would see a total elimination of cost of living adjustments (COLAs) under the budget plan, and those in the Civil Service Retirement System (CSRS) would see a 0.5 percent reduction of COLAs.

• Elimination of FERS Annuity Supplement

Current FERS retirees who left service before Social Security eligibility qualify for an annuity supplement. This would be eliminated for new retirees.

• Increases to postal employee contributions to FERS

FERS enrollees will see an increase of their contributions by one percent over six years. By doing so, employee and employer contributions will be equally divided. 

• Changes to the G Fund

The Thrift Savings Plan’s (TSP) G Fund interest rate would be modified under the Trump Administration’s endorsed budget. Proposed changes would lower the rate to under one percent. This would only possibly save the federal government $16.5 billion over 10 year, and make the G Fund virtually worthless for those TSP participants.

• Changes to Retirement Services & Healthcare Administration

The management and administration of both retirement reservices and healthcare will move from the duties of the Office of Personnel Management to the General Services Administration.

For this budget plan to come to fruition, it would have to be approved by the U.S. House of Representatives and the Senate. The Senate Budget Committee released its budget plan for fiscal year 2020 on March 22. In it, the Senate Homeland Security and Governmental Affairs Committee is requested to develop $15 billion in savings. This would most likely come in the form of reductions to employee health care benefits.

The House Budget Committee has yet to release its fiscal year 2020 plan. Votes on past plans to cut pay and benefits did not pass in either the House or Senate.

It is important to be aware of these threats and to raise your objections to your lawmakers.

“APWU will continue to meet with elected officials, on both sides of the aisle, reminding them of the value of the work of postal and federal workers to this nation,” said Legislative & Political Director Judy Beard. “Retirees should live with respect; receiving COLAs and annuities that should be increased, not cut. Federal budgets should lift workers and communities up, not tear them down.”