USPS suspends employer contributions to FERS

WASHINGTON — The U.S. Postal Service has informed the Office of Personnel Management (OPM) of its intention to suspend its employer’s contributions for the defined benefit portion of the Federal Employees Retirement System (FERS) to conserve cash and preserve liquidity. The Postal Service has a FERS account surplus valued at $6.9 billion.

“We will continue to transmit to OPM employees’ contributions to FERS and also will continue to transmit employer automatic and matching contributions and employee contributions to the Thrift Savings Plan,” said Anthony Vegliante, chief human resources officer and executive vice president.

The Postal Service pays about $115 million every other week to OPM for the FERS annuity. Suspension of payments, effective June 24, will free about $800 million in the current fiscal year.

The Postal Service continues to cut costs significantly with initiatives to reduce the size of its labor force, the number of mail processing facilities and administrative overhead. Over the last four fiscal years, the Postal Service has reduced its size by 110,000 career positions and saved $12 billion in costs.

The Postal Service also is generating new revenue by opening cost-effective new retail locations in places where people already shop, including grocery stores, drug stores and office supply stores, and introducing other new product and pricing initiatives.

Despite significant cost reductions in areas within its control, and even with this emergency action, the Postal Service needs Congress to enact legislation that would do the following to return the Postal Service to financial stability:

  • Eliminate the current mandates requiring retiree health benefit pre-payments.
  • Allow the Postal Service to access Civil Service Retirement System and FERS overpayments.
  • Give the Postal Service the authority to determine the frequency of mail delivery.

via USPS News Release: U.S. Postal Service Institutes Cash Conservation Plan.

USPS FERS FAQ

  • Jack

    This ship is sinking.

  • Linda

    Burn you sick leave folks
    The end is near !

  • Marcus

    Outstanding news. Congress would steal the money.

  • Ron

    Ship is a slow sinker! The “rats” stole my lifejacket! The lifeboats have holes too… o_O!

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  • dan

    Stash it quickly …..before Issa and Ross get their paws on it……

  • Charlie

    Is this a scare tactic to get more people to retire? This is why the ship is sinking POOR POOR management. Thanks for nothing you bunch of thieves. Why don’t you just offer some incentive to retire. Not the usual VERA. You can retire early, but we take a bunch of you money. Nice incentive! Put us on welfare to retire. Sorry I would just like to get to the end of my career with enough to live on. Not going to happen at the rate things are going.

  • brian

    How do you figure? The point is that the USPS already has a $6.9 billion surplus in its FERS account- paying more into it is stupid until the surplus is exhausted.

  • twankwort

    Sucks to be treated like private sector. mwahaahaaahaa.

  • JY

    Personally, I think it’s a smart move. Why continue to contribute to an over funded account? Would you continue paying your car insurance even though it’s already paid up?

  • Ray

    when postmaster general potter retires he got over five million dollars. Now they are getting five percent of our retirement. THere is a lot of things wrong with this picture. If the postal service cares about its employees that make this country stay running, why are they mistreating us were it matters most?

  • brian

    Who’s being mistreated?

  • sentinal

    Everyone who contributes to tsp within the usps. Do you honestly believe the govt will simply restart funding this pension fund once stopped? In 2 years anyone still employed by the usps will be adversely effected. How does the board of governors have to power to do this but not stop Saturday delivery without congressional approval.

  • brian

    It doesn’t have anything to do with TSP- TSP matching payments continue as usual. It’s the FERS retirement fund, which is already overfunded by $6.9 billion. Why would you keep making payments to fund that you’ve overpaid already? Do I think they will restart the payments once the surplus is drawn down? Yeah- why wouldn’t they? Stopping the payments now makes no difference whatsoever to any current or future retirees. Not restarting the payments after the surplus is gone would be illegal.

    Bottom line- the USPS would be stupid NOT to stop unnecessary payments, and doing so doesn’t harm anyone.

  • sentinal

    What happens in 2 years when the surplus is exhausted?

  • sentinal

    If the postal service is not capable of paying this in 2 years…what happens?

  • brian

    Well obviously, if there hasn’t been a resolution to the overcharging issue, there won’t be a USPS to worry about. Congress and the administration have to get together and come up with a solution. If they don’t, then in two years the USPS will be dead and buried. Stopping these payments now just buys a little more time. If USPS keeps adding unnecessary funds to the FERS surplus, it’s just hastening a politically engineered default. What would you suggest?

  • Poor Richard

    To sentinal. In two years, the mail will be delivered. Stop whining, and if you’ve been telling people you work for the USPS, stop. You give us a bad name.

  • sentinal

    To poor Richard…if you followed this entire post and not simply trolled then you would know that I never claimed, nor would I, that I was a usps employee.
    What I would suggest is this; stop weekend delivery. Close all processing facilities after tour 3 Fri and reopen tour 1 Sundays. Cut EAS AND admin by 20%. Cut bargaining unit employees by 10%. Get rid of contract MVS. FIRE those that don’t come to work. Freeze performance based bonuses ….we all know that usps is underperforming..lol

  • sentinal

    Almost forgot to add this point. The board of governors doing this is comparative to putting a butterfly stitch on a severed artery. Not only is the usps responsible for this but so is congress for rejecting solutions. You want to fix this, look at what your competitors have done during these times.

  • brian

    Our competitors haven’t been taxed an additional $30 billion for an arbitrary trust fund- that’s the obvious solution.