Postal Reform USPS

The United States Postal Service in more than an American institution; it’s also a source of thousands of federal jobs. Americans rely on the postal service to transfer important documents and social greetings from friends, while postal workers rely on the USPS to keep them employed and provide care in the form of retirement and paid benefits.

While the USPS might seem strong and untouchable, the past decade and the Internet era have driven the institution into debt. Lawmakers are working to make the USPS profitable by changing how it operates in relation to other federal agencies.

Here are a few steps Congress is taking that could affect federal USPS employees.

The Current State of the USPS

The United States postal service has reported 11 straight years of net losses, and a net loss for the first quarter of the fiscal year of $540 million. In 2017, the USPS reported a $2.7 billion net loss. These losses are due to decreased mail volume because of the Internet and increased competition by FedEx and UPS.

A negative revenue stream alone is concerning to USPS employees, but there are other reasons they should be worried. According to PIWorld, the Postal Service has defaulted on retiree health pre-funding payments and missed payments to the federal retirement system. These two missed payments total $6.9 billion.  

Opponents of the pre-funding system say the costs the Postal Service has to pay to keep up with retiree costs means it can’t invest in infrastructure plans to maintain and grow its operations, limiting its revenue and its ability to cover retirement costs and health insurance. The current plan creates a catch-22 where the USPS can’t generate revenue because of retirees, but needs to in order to care for them.

USPS postal service reform

Bipartisan Lawmakers Propose 2018 Postal Service Reform Act

Three Democratic and one Republican senator proposed a joint bill to protect the USPS and make sure it has enough funding in 2018 and beyond. The goal of the 2018 Postal Service Reform Act is to improve USPS performance in rural communities and create more services that Americans can use to make sending mail and packages easier.

A few provisions in the bill include:  

  • Postal retirees will enroll in Medicare parts A, B, and D as their primary health care provider instead of the pre-funded healthcare system.
  • Outstanding pre-funding payments will be wiped clean, allowing the USPS to make payments to remaining liabilities over the next 40 years.
  • There would be a freeze in postage price increases until there is a new system for rate setting, ensuring the USPS stays competitive as businesses look to save money.
  • There would be no service cuts over the next two years.
  • The USPS would be able to deliver alcohol as one of its new lines of revenue.

A similar bill died in Congress in 2016, and there are multiple provisions in this piece that are up for debate. However, understanding the context of this bill can help Americans determine whether they support it or not.

The proposed 2018 Postal Service Reform Act aims to improve USPS performance in rural communities and create more services to make sending mail and packages easier.Click To Tweet

Some Call for Postal Service Bailout in 2019 Budget

Along with making changes to the operations and payment processes of the USPS, some economic experts are calling for a Postal Service bailout in next year’s budget.

There are multiple factors within The White House’s 2019 budget proposal that affect federal employees and the agencies that fund them. This year’s budget proposes 2.6% military pay raise but a complete freeze on civilian employee raises.

It’s unlikely that one person, regardless of their party of political affiliation, would agree with every budget item in the proposal. Over the next few months, there will be arguments, debates, and changes related to various sections of this proposal before it is finalized.

Most politicians agree that something needs to be done to make the USPS profitable, but they differ on how it can be done. Following various bills and proposals can help federal employees and concerned citizens stay abreast on how the government is handling the budget and American institutions.

OPM Approves VERA Window for USPS Employees

While members of Congress work to protect the USPS and the employees who work for it, the organization hoped to cut down on staff through a voluntary early retirement offer window earlier this year. During a VERA, the agency lowers the age for retirement and for employees to access benefits.

The goal is to encourage older employees to retire in order to reduce staff. Additional voluntary leave windows or reductions in force (RIF) could be coming without proper funding.

If you work for the USPS and are concerned about your future, or are about to retire and are considering leaving early, contact MyFEDBenefits. We have a free benefits workbook to help you understand your retirement options and prepare you for a successful financial future.

There will be a lot of changes at the USPS over the next few years, but you can navigate them confidently with the right financial planning. Contact a MyFEDBenefits specialist today. 

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