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Discontinued Service Retirement
Is an Option for the Disrupted

(This article was first published in the January/February 2006 issue of The American Postal Worker magazine.)

In light of management’s determination to disrupt the lives of thousands of postal employees with its plans for “network consolidations,” it is time for workers to examine all the options, including one that is not well known: Discontinued Service Retirement.

The APWU does not advise employees either way on the discontinued service option. But it is a choice that employees may wish to consider if they are faced with the alternative of relocating their families to another area.

Who Qualifies?

To be eligible for a Discontinued Service Retirement you must meet specific age and length of service requirements, and you must have been offered a reassignment option that is outside the defined “commuting area.”

The age requirement is 50 years, and you must have at least 20 years of creditable service to qualify for discontinued service. There is no age requirement if you have 25 years or more of creditable service. (Note: “Creditable service” does not include unused sick and/or annual leave.)

Military veterans can meet either the 20- or 25-year service minimum as long as at least five of their total years of service are creditable civilian service; their creditable military service can be used to meet the balance of service necessary for a discontinued service retirement.

Employees who meet the service and age requirements and who are reassigned to another location outside their commuting area will qualify for a discontinued service retirement if:

• The new work site is outside the commuting area applicable to the old work site; and
  
  
• Complying with the change would compel the employee to change his or her residence in order to continue employment.

In situations where the new work site is outside the commuting area applicable to the old work site, the employees’ personal circumstance become relevant.

For example, Washington, DC, and Baltimore are about 35 miles apart, but are in separately defined commuting areas. Nevertheless, some employees live in or very near one city and work in the other. If an employee who lives in Baltimore and commutes to Washington is reassigned to Baltimore, the employee does not become eligible for discontinued service retirement because he or she does not need to change residence as a result of the reassignment.

Local Commuting

The regulatory requirements governing Reductions In Force ( RIF ’s) are contained in Title 5 of the Code of Federal Regulations (Part 351). In addition to covering veterans’ preference and length of service implications, the regulations define a local commuting area, which usually constitutes, for employment purposes, a single geographic area.

The area includes any population center (or two or more neighboring ones) and the surrounding localities in which people live and reasonably can be expected to travel back and forth daily in their usual employment.

This definition of commuting area is also used for retirement, severance pay, and grade/pay retention purposes.

Chapter 44 of the Civil Service Retirement System/Federal Employees Retirement System Handbook focuses on discontinued service requirements. Click here for more information on this subject.

While the qualifications for discontinued service are the same whether an employee is under CSRS or FERS, the benefits are different. Careful research should be the order of the day — several days — for anyone considering this form of retirement.

For a Few Cents More

Shortly after this issue of The American Postal Worker went into the mail, postage rates were scheduled to rise. The effective date of the change is Jan. 8, 2006.

“This rate increase — the first since 2002,” the USPS announcement said, “is needed to fulfill the requirement of a federal law passed in 2003. That law requires the Postal Service to establish a $3.1 billion escrow account, with use of the funds to be determined by Congress at a later date. Without this federal mandate, it would not have been necessary to raise rates in 2006.”

The rates are rising again not because of the rising cost of doing postal business, but because the Bush administration opposes releasing from an escrow account billions of dollars that the USPS has saved by ending overpayments to the Civil Service Retirement System (CSRS).

The White House also opposes returning to the Treasury responsibility for paying the military-service related retirement pay for postal employees. That responsibility was transferred to the Postal Service two years ago under the same law that allowed the Postal Service to end overpayments to the CSRS system. As we keep pointing out, no other government agency bears responsibility for military retirement costs!

The additional two cents for each piece of first-class mail will generate billions of dollars to help pay the additional retirement costs, all of which contributes to funding the huge deficit created by tax cuts for the wealthy.

As I write this article, the national debt is more than $8.1 trillion dollars and, for the past three months, climbing more than $3 billion per day. To say that these numbers pose an unfair burden on our children and grandchildren is an understatement almost as great as the deficit itself. This budget deficit will have long-term consequences on America , and on each and every one of us.

Two decades ago, President Ronald Reagan vetoed a spending measure sent to him by a Democratic Congress because a conservative think-tank convinced him that it included $1 billion worth of “pork.”

Recently, President George W. Bush approved a spending measure prepared by a GOP Congress that the same conservative think-tank said contains $43 billion dollars worth of pork, including the famous $200-million-plus “bridge to nowhere” that would connect Alaska ’s virtually uninhabited Gravina Island with the mainland town of Ketchikan , and its population of 8,000.

Yet when hurricanes Katrina and Rita devastated the Gulf Coast and recovery costs were estimated to be at least $50 billion, did Congress revisit its waste? No! Did it cancel tax breaks for the rich? No!

And what proposals were put on the table to improve the budget to help pay to rebuild storm-impacted areas?

• Make the elderly pay a greater share of their Medicare costs;
  
  
• Reduce grants for college education; and
  
  
• Eliminate home-mortgage interest as a tax deduction, once again shifting a greater share of the tax burden to the working class.

Our lifestyle is under constant attack and we must work together to defend it.

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