On June 21, the Postal Service suspended the employer contributions in the defined benefit portion of the Federal Employee Retirement System (FERS.) The move was meant to conserve cash, saving $115 million a pay period.
FERs retirements are made up of three parts -- Social Security, Thrift Savings Plans, and the annuity, or defined benefit. This last part is the one that's affected.
The defined benefit is over funded by as much as $6.9 billion.
Currently 85 percent of employees are in the FERSs system.
It doesn't affect TSP accounts or the matching contribution to it. The OPM thinks the move could jeopardize service credits issued to employees that would count toward retirement. USPS disagrees and has referred the issue for resolution to the Office of Legal Counsel in the Justice Department.
What do you think about this? When should we resume payment once the new fiscal year starts?
Comment here.
PMG Donahoe has some comments and recorded a video.
13 comments:
We should not loose sight that we are still part of the federal government. Are the other departments of the federal government also removing their funds and starting their own plans? Moving the funds to a company that has already declared themselves "insolvent" should not be entrusted with such responsibility.
uhhh...I don't think you get it.....they ain't got the money honey!
That isn't exactly the way I understood it. The USPS quit pre-funding the plan for future retirees in order to have more money presently available to run the USPS as we are just about out of money. The proposal to take over the 2 retirement plans and create our own is a new proposal, which would theoretically be more efficient; yet it is unclear how it would be set up and what kind of credit we would get toward retirement.It is all quite unsettling. No thanks to Congress for sitting on several proposals for 2 years while we go broke.
We can't trust that the "powers that be" will do the right thing for us. Get the money where we have control over it and that is not in the hands of our elected officials. I also don't believe we are getting all of the details and until they are honest, open and upfront with a clear consise plan I wouldn't want to agree to anything.
How does not paying into the TSP fund (401k) not affect employee accounts? Why is that overfunded as well? Time to fire the head accountant. If I ran my office like that, I would have been out years ago.
As for pulling out the retirement funds and USPS running it, no thanks to that either. There are still too many chiefs in HQ, Area, and District offices who would like to get their hands on that money. I will take my chances with Congress.
I do not think we should resume paying into FERS until the overpayment is used up, unless the Office of Legal Counsel decides that our FERS employees will lose service credit for the period during which payments are not made, and -- then -- only if we can afford to do so without compromising payroll and the delivery of the mail.
I also don't think we should pay into FERS until the overpayment is used up. I also don't think we should pay the retiree health benefit prepayment until the CSRS overpayment is used up. CSRS overpayment would pay all the health per payment and still give us a refund. Good luck getting any cash out of congress. They have used the Postal Service as a cash cow for years, now they want to kill the cow!
AMEN to the last comment!!!!!!!!!! Congress can't give the money back. DUH!!! They are BROKE also!!
Where oh where did our postal service go?????????????
I would say let's go back to being a part of the Federal Government, but I don't think that would change the status quo. That is where all the money went, we might as well go with it. Clean house, starting at the top.
I agree with the clean house!!!1 And the top is were it should have started to begin with!! OH WAIT!!!! It did and none of those people lost there jobs they were just moved around to better jobs!!! Now that really helped out the postal service didn't it!?!?
RIF, WHAT A JOKE!!!!!
What i think is funny is no one has seen what is really going on with all of this. They have managed to divide and concor!! They have the management fighting with the craft people and so on and so forth. That way none of us will ban together, we are out just for ourseleves. HUMM!!!
We are going to go to private or goverment. The question is wich one are we going to be when all of this realining is over? And wich one is going to be the best option for us as postal employee's?
So if we are going to defalt on the payment's we owe and we get the money back we overpaid and everything is in the black and we are just fine. What is there excuse going to be in 5 year's when we will be sitting in the same place. If you go by everything they are say to us it will not make that much of a difference and if mail keeps declining were will the next set of funds come from? The big question is why did they let everything get so bad to begin with? Why were they not taking steps to stop this before it happened?
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