Home Departments & Divisions Legislative Dept. ArticlesCredit for FERS Sick-Leave

An Important Victory
A Credit for FERS Sick-Leave

Myke Reid,
Legislative & Political Department Director

(This article appeared in the January/February 2010 issue of The American Postal Worker magazine.)

Postal and federal workers enrolled in the Federal Employee Retirement System (FERS) won an important victory in October, when a new law made them eligible to receive credit for unused sick leave when they retire. Effective with the signing of the bill on Oct. 28, retiring FERS-covered workers will receive a 50 percent credit for unused sick leave until Dec. 31, 2013. FERS-covered employees who retire on or after Jan. 1, 2014, will receive full credit.

CSRS employees already receive credit for unused sick leave when they retire; FERS employees wanted similar treatment and now they have it.

This benefit, which unions representing federal employees have sought for more than a decade, took a tortuous journey around Capitol Hill during this session of Congress. The FERS sick-leave provision started out as a separate bill, but ended up as part of the much larger 2010 Defense Department Authorization measure, which contains other improvements for postal workers as well.

Rep. Edolphus Towns (D-NY) and Rep. Stephen Lynch (D-MA) played key roles in ensuring that these provisions were included in the Defense Authorization bill (H.R. 2647), while Sen. Daniel Akaka (D-HI) was instrumental on the Senate side.

The measure initially sailed through the House; it passed on June 25 by a vote of 389 to 22. But in the Senate, Tom Coburn (R-OK) derailed the measure by threatening a filibuster unless those provisions were removed. Each chamber then passed its own version of the defense measure, and the bills were sent to a House-Senate conference committee to resolve differences.

During the conference committee discussions, the FERS sick-leave language was restored. The conference committee passed the amended bill on Oct. 7. The House approved the conference committee version Oct. 8 by a vote of 281 to 146; the Senate followed suit on Oct. 22, by a vote of 68 to 29. The 2010 Defense Authorization Act (P.L. 111-84) was signed by President Obama six days later.

T-COLAs and More

In addition to the sick-leave credit, postal and federal workers in Hawaii, Alaska and other U.S. territories will now have their territorial COLAs converted to a system based on locality pay. These T-COLAs, as they are known, will be treated differently for postal workers than for other federal employees. The T-COLAs of non-postal federal employees will be taxed, and the earnings will be credited toward their retirement. The T-COLAs of postal workers will not be taxed and they will not count toward their retirement. Postal employees in Alaska, Hawaii and other U.S. territories also receive contractual COLA adjustments, and those earnings are taxed and become part of the employees’ base pay for retirement calculations.

Two other provisions in the Defense Authorization measure also benefit postal workers:

Federal retirees rehired by federal agencies on a limited, part-time basis no longer will experience a cut in their retirement annuities.

FERS employees who left but have returned to government service may re-deposit savings in the retirement system and earn credit for years they already worked in government; for the purpose of survivor benefits, deposits may also be made by a survivor or member of the program.

Some Relief, But . . .

The Postal Service received some short-term relief from its financial crisis in September, when H.R. 22 was enacted. The House of Representatives voted 388 to 22 on Sept. 15, 2009, to reduce USPS payments into the Retiree Health Benefits Fund for 2009 from $5.4 billion to $1.4 billion. The Senate followed suit on Sept. 30, 2009, by a vote of 62 to 38, and President Obama signed the bill the same day.

The measure was desperately needed because a provision of the Postal Accountability and Enhancement Act of 2006 (PAEA) requires the USPS to pay more than $5 billion each year for 10 years to pre-fund retiree healthcare obligations. This burden is borne by no other federal agency or private business.

Despite the stopgap measure, however, APWU members should realize that the Postal Service’s financial difficulties will persist as long as the pre-funding provision of the PAEA remains in effect.

Furthermore, union members are cautioned that the passage of short term funding measures do not preclude further consideration of S. 1507, a Senate bill that includes an amendment that would interfere in our collective bargaining process. The amendment would require arbitrators to consider the financial health of the USPS when ruling on postal collective bargaining units. Although arbitrators routinely consider the Postal Service’s financial condition, this requirement would elevate that factor above all others, tipping contract negotiations in management’s favor.

Consolidation Threats

Postal Service plans to consolidate postal facilities and close stations and branches across the country have made a bill that was introduced nearly a year ago a continuing priority.

H.R. 658, introduced by Rep. Albio Sires (D-NJ), on Jan. 22, 2009,would alter the statutory process for closing USPS offices. The bill would require the Postal Service to follow specific procedures when it is considering consolidating or closing any facility. These include:

  • Requiring the USPS to produce a detailed assessment of the need for the closing or consolidation;

  • Eliminating a requirement to consider the resulting economic savings;

  • Expanding the public notification process by requiring theUSPS to notify affected communities by both news media and mail, and inviting public comment for 90 days before any final decision is made; and

  • Allowing input by all affected parties and permitting appeals to the Postal Regulatory Commission.

The Mail Network Protection Act

Also last year, Rep. Stephen Lynch (D-MA) reintroduced a bill that would limit wasteful, inefficient, and detrimental subcontracting practices by the U.S. Postal Service.

For the current session of Congress the bill number is H.R. 1686. (Previously it was H.R. 4236). This legislation would require the USPS to negotiate with the impacted unions whenever the work to be outsourced would cost more than $5 million over a 12-month period or would involve 50 or more man-years of work.

Recent history shows that when Postal Service’s plans are held up to public scrutiny we have been successful in preventing or reversing some of the more egregious actions.

We call on our members to contact their representatives in the House and urge them to co-sponsor H.R. 658 and H.R. 1686. Click here to contact them online.

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