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Local President's Page

JHL

April 2012 Update

Recent action by the US Senate seems to have calmed some tensions at the facilities facing consolidation, at least for the time being.  It still remains to be seen, however, whether the House of Representative can pass legislation which can be reconciled with the Senate bill and then presented to the President.  Once again we are left in the position of having to wait and see.  While there are some parts of the Senate bill which I find troubling, there are several aspects which may facilitate an improved financial outlook for the Postal Service.

 

Paramount among these reforms is the proposed re-amortization of the schedule pertaining to the pre-funding of retiree health benefits.  The provisions of the Postal Accountability and Enhancement Act of 2006 require that the Postal Service pre-fund 75 years of retiree health benefits in a 10 year period.  It is this pre-funding requirement which has been reported as responsible for 84% of recent Postal Service shortfalls.  The recently passed Senate bill provides that this payment schedule will be re-amortized to allow 40 years to accomplish this pre-funding requirement.  The notion of pre-funding benefits is not a bad idea in and of itself; it’s simply that the schedule utilized by 2006 law has proven to be overly ambitious.

 

Another provision of the Senate bill authorizes the refund of nearly $7 billion which the Postal Service has overpaid into the Federal Employees Retirement System.  The purpose of this refund is to allow incentives for an early retirement offer and to possibly repay some debt.  Many people with whom I’ve spoken recently have inquired about the possibility of an early out.  I’ll share here what I’ve shared with them, as soon as I know you’ll know.

 

Other provisions of the Senate bill which will have a less direct impact on Mail Handlers include, allowing the Postal Service to ship beer, wine, and distilled spirits as well as allowing the Postal Service to sell non-postal products and services under appropriate circumstances.

 

On the downside this legislation allows the Postmaster General to implement 5-day delivery after 2 years, should it be necessary, and after exhausting all other cost-saving measures. Also, there is a requirement that an arbitrator deciding a contract impasse consider the financial situation of the Postal Service in conjunction with the other relevant factors.

 

So as we head into May we wait to see the outcome of mediation over the terms of the 2011 National agreement and watch the US House of Representative on the legislative front.

 

JL