- The Washington Times - Monday, July 14, 2003

It will soon be bail-or-be-quiet time for thousands of long-service postal clerks.

The government’s second-largest agency is about to offer early retirement — on immediate annuity and with lifetime health insurance coverage — to thousands of members of the American Postal Workers Union.

The Postal Service has said it has a surplus of around 16,000 clerical employees, and that as many as half of them will get VERA (voluntary early retirement authority) offers this fall. The union says its deal with the Postal Service is that “any” employee who meets the age/service requirements is to get an offer.

To take early retirement, feds must be age 50 or older with at least 20 years of service, or they can leave at any age with 25 years of service. Retirement benefits are reduced 2 percent for each year before age 55.

Most of the retirement-eligible postal workers are under the old Civil Service Retirement System. CSRS benefits (based on the employee’s highest three-year average salary) are indexed immediately to inflation and adjusted each year.

Regardless of whether the early-out is limited or open to all, neither labor nor management can answer the big question: How many people will sign up if offered early retirement. It’s an option most feds would like to have, but in the past only about 3 percent of workers offered early retirement, without an accompanying $25,000 buyout, actually took it.

Other federal agencies that can apply for easy-approval buyout and early-out authority will be watching to see how the Postal Service early-out goes, and how many people go with it.

Fringe benefits

As private firms go belly up, lay off staff and cut retirement plans and health care benefits, the federal fringe-benefit package looks better all the time.

It includes 13 to 26 days of annual leave, unreduced retirement at age 55 with 30 years of service and other features. Federal health insurance benefits continue for life, not until retirement, and are about to get even better.

The House last week voted to insulate the Federal Employees Health Benefits Plan from any benefit cutbacks or extra costs that would be charged nonfederal workers under the Medicare prescription drug bill.

Several Democrats denounced it as the worst kind of economic elitism (giving civil servants and elected officials better benefits than taxpayers), but opposition disappeared when the vote — requiring a two-thirds majority — was taken.

Step two for the federal health care program came with opening hearings for a plan to extend the premium-conversion perk to federal, postal and military retirees. Under current law, only active-duty feds, not retirees, can pay their health insurance premiums and trim their tax bills with pretax dollars. The tax code must be changed before the benefit, which would save the typical retiree $300 to $500 a year in taxes, can be extended to them.

If both improvements are approved by Congress, the federal program, now considered the gold standard of American workers’ health care, would move into the platinum category.

Thrift Savings blues

Many federal/military investors are furious over the computer glitches that have plagued the federal 401(k) plan’s daily valuation system.

The system was supposed to make it easier for feds to make and get loans, check account balances and move money from one fund to another. But bugs in the system introduced last month stalled some loan applications and left many workers on hold until their fingers went numb calling for help.

Catch-up contributions

Most federal/military offices are taking applications from Thrift Savings Plan investors age 50 and older who want to put up to $2,000 more into their investment funds by December. The pretax break is a good deal. In most cases, the higher deductions will begin early in August. But Defense’s computers won’t be ready to take the extra payments until early in September.

That means Defense Department employees who want to contribute the maximum $2,000 via payroll deduction will need an extra $286 to $334 to max out, depending on how many pay periods they have until year’s end.

Mike Causey, senior editor at FederalNewsRadio.com, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide