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2004 Federal Employees Almanac

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U. S. Postal Service Overview

• Section 1—Postal Organization
• Finances
• Section 2—Labor Unions and Employee Organization
• Section 3—Postal Pay General Salary Structures
• Section 4—Postal Employee Benefits

Section 1—Postal Organization

The Postal Service is the largest civilian organization in the United States. With more than 800,000 full-time career employees and 100,000 part-time employees and an annual budget of more than $60 billion, the Postal Service delivers over 200 billion pieces of mail every year.

USPS has headquarters in Washington, D.C., but maintains postal facilities throughout the United States, including nearly 38,000 post offices. The Postal Service is governed by a nine-member Board of Governors, whose members are appointed by the President with Senate confirmation. The nine Governors then select a Postmaster General, who becomes a member of the Board. Those ten select a Deputy Postmaster General, who also serves on the Board.

The nine Governors of the Postal Service are appointed for staggered nine-year terms and can be removed only for cause. In addition, no more than five Governors may belong to the same political party. The Postmaster General serves at the pleasure of the Governors for an indefinite period and is the Chief Executive Officer of the Postal Service. The Deputy Postmaster General serves at the pleasure of the Postmaster General and the Board.

The Board directs the exercise of the powers of the Postal Service, directs and controls its expenditures, reviews its practices, conducts long-range planning, and sets policies on all postal matters. The Board takes up matters such as service standards, capital investments and facilities projects exceeding $10 million. It also approves officer compensation.

There are two general divisions within the Postal Service, each headed by a vice president. One division is composed of processing and distribution sites, such as bulk mail centers and the second is composed of 90 customer service districts managing all the post offices.

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Finances

The Postal Service announced in November 2002 that it had been overfunding its Civil Service Retirement System (CSRS) account for 30 years and owed $5 billion, instead of $32 billion, to the fund. If Congress approves a change in the Postal Service’s funding payment schedule, it will have to pay $2.9 billion less into the CSRS fund for 2002 and $2.6 billion less for the next several years than it thought it would. The post office’s financing formula includes 30-year and 15-year amortization schedules aimed at covering retirement costs linked to postal employee pay raises and cost-of-living adjustments (COLAs). Postmaster General John E. Potter said the reduction in pension contributions would be used to pay down the debt and keep postal rates steady until 2006.

A review team led by the Office of Personnel Management (OPM) discovered that the USPS had been overpaying the billions of dollars. It found the statutory formula that sets the rate for pension payments was out of whack, in part because of higher-than-anticipated yields on pension investments. The Postal Service paid $152.1 billion into CSRS to cover annuities for postal workers and was due to pay $91.5 billion more in future payments, under the formula. That figure, it turned out, was $71 billion higher than the amount needed to cover the cost of future postal retirements, officials said.

The Postal Service subsequently announced that it had a surplus of $27 billion. Potter stressed that the agency would continue to cut costs, consolidate mail-handling plants and urge Congress to permit more flexibility in the processing and pricing of mail.

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Section 2—Labor Unions and Employee Organizations

An overwhelming majority of postal employees belong to either labor unions or one of the management or supervisory organizations. The 1970 Postal Reorganization Act authorized collective bargaining on wages and working conditions under laws applying to the private sector and provided for binding arbitration if an impasse persists 180 days after the start of bargaining. The ability of many postal employees to bargain over their pay rates is a right that is not enjoyed by other federal employees, although postal workers, like other federal employees, are still barred from striking.

Four large postal unions represent most postal workers and negotiate for them during collective bargaining. They are:

• The American Postal Workers Union, AFL-CIO, representing 366,000 union members.
• The National Association of Letter Carriers, AFL-CIO, representing 315,000 postal workers.
• The National Rural Letter Carriers Association, representing 96,000 postal workers.
• The National Postal Mail Handlers Union, representing 50,000 postal workers.

In addition to the four major unions, there are smaller unions representing postal inspectors and postal nurses.

Three management associations represent postal supervisors and postmasters. These associations cannot bargain over pay issues like the unions but they do negotiate over other working conditions. The associations are:

• The National Association of Postal Supervisors. NAPS represents 35,000 active and retired supervisors and managers.
• The National Association of Postmasters of the United States. NAPUS represents 40,000 active and retired postmasters.
• The National League of Postmasters. The League represents 27,000 active and retired postmasters.

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Section 3—Postal Pay General Salary Structures

There are two general types of salary structures used by the postal service, as well as a specialized structure for rural letter carriers.
The two general salary structures are:

• PS-Postal Service salary structure. Applicable to bargaining unit personnel (clerks, carriers, etc.) except rural letter carriers, mailhandlers, nurses, and postal police officers.
• EAS-Executive and Administrative Salary structure. Applicable to executives, professionals, supervisors, postmasters, and technical, administrative and clerical non-bargaining employees. Salary grades in the schedule range from EAS-1 through EAS-26. Postmasters whose offices are open less than 40 hours per week are on a separate schedule.

The pay period for all employees begins on Saturday and covers a 2-week period ending on Friday. Employees are paid every 2 weeks following the end of the pay period.

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Section 4—Postal Employee Benefits

Postal employees generally receive the same benefits as other federal employees with a few exceptions.

Retirement—Postal Service career employees, like federal career employees, are covered by one of three retirement systems administered by OPM: the Federal Employees Retirement System (FERS), the Civil Service Retirement System (CSRS) and by CSRS Offset. FERS is a retirement system with both defined benefit and defined contribution components. Under FERS, employees receive retirement benefits from a federal retirement annuity, Social Security, and the Thrift Savings Plan. The FERS annuity benefit, while also based on an employee’s high-three average salary and years of service, produces a smaller benefit than CSRS does. CSRS is a defined benefit retirement system. Annuity benefits are based on an employee’s high-three average salary and years of service. CSRS Offset is similar to CSRS but requires Social Security contributions. Upon Social Security eligibility, the CSRS annuity is reduced by any Social Security benefit resulting from periods of CSRS Offset service, to produce a benefit equivalent to what would have been received under CSRS.

Health Insurance—The Postal Service participates in the Federal Employees Health Benefits Program and all postal employees can receive health insurance coverage through that plan with the cost split between the Postal Service and the worker. For most federal employees the split is determined by Congress. However, postal unions negotiate the actual split as part of the collective bargaining agreements, so postal workers often pay a different amount than other federal workers, and postal workers from different unions may pay different amounts. Postal employees should review the health benefits section of the Almanac for complete information on how the FEHBP works, premium amounts and plan contact information.

Life Insurance—The Postal Service offers life insurance coverage through the Federal Employees Life Insurance Program. However, while other federal employees must pay part of the cost of the basic coverage, the Postal Service pays the entire premium amount for its active employees. There are additional options for purchasing more insurance through the FEGLI program. Postal employees should review the life insurance section in the Almanac for more details.

Flexible Spending Accounts—Employees can use Flexible Spending Accounts (FSAs) to pay for certain health care and dependent care expenses with contributions made through pretax payroll deductions. FSAs were first offered in 1992 to certain non-bargaining unit employees and now include all employees. Employees experience tax savings as well, which vary according to the individual’s contribution amounts and marginal tax rates.

Thrift Savings Plan—Postal employees may participate in the Thrift Savings Plan (TSP), which is administered by the Federal Retirement Thrift Investment Board. The rules for TSP participation differ depending on the employee’s retirement system. For FERS employees, the Postal Service contributes one percent of basic pay to TSP, fully matches employee contributions up to 3 percent of basic pay, and matches one-half of employee contributions from 3 to 5 percent of basic pay. The Postal Service does not match CSRS or CSRS-Offset employee contributions to the TSP.

Leave—Postal Service employees are provided both sick and annual leave at the same rate as other federal sector employees. However, postal employees have a higher annual leave carryover limit than their federal sector counterparts. Earned annual leave may be donated to other career or transitional Postal Service employees who have exhausted their own leave and have a serious health problem. The Postal Service allows the use of 80 hours of accrued sick leave for dependent care under a policy available to all career employees.

Family and Medical Leave—Postal employees are covered by the 1993 Family and Medical Leave Act, which provides time off for employees who are dealing with serious health conditions. The law provides that eligible employees can take up to 12 workweeks of leave within a Postal Service leave year for the following: birth or adoption of a child, taking in a child for foster care, caring for a family member with a serious health condition, or dealing with the employee’s own serious health condition. Time taken for family and medical leave can be taken as annual leave, sick leave, leave without pay or a combination of those.

Holidays—The Postal Service observes the 10 designated federal holidays each year. They are: New Year’s Day, January 1; Martin Luther King Jr.’s Birthday, third Monday in January; Presidents’ Day, third Monday in February; Memorial Day, last Monday in May; Independence Day, July 4; Labor Day, first Monday in September; Columbus Day, second Monday in October; Veterans Day, November 11; Thanksgiving Day, fourth Thursday in November; Christmas Day, December 25.

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