Federal Daily News
Updated USPS five-year plan slashes postal workforce
The U.S. Postal Service last week released updated projections and legislative recommendations for its five-year plan, which USPS said can produce savings of at least $20 billion a year by 2015. The plan calls for trimming 155,000 full-time positions from the postal workforce over the period.
The updated plan hinges on a number of long-discussed changes that rely on the cooperation of Congress—including the elimination of the requirement that USPS prefund retiree healthcare benefits.
USPS has been arguing for years against the prepayment scheme, and has factored an end to the requirement into the five-year plan. The prepayment costs USPS $5.5 billion a year.
The plan also includes estimates of the financial impact of a USPS transition to a new employee health benefits program independent of other federal programs. USPS said the plan would include “three distinct categories of participants” — annuitants, current employees and new hires — and that it would be a “tiered program tailored to each category’s needs.”
By shedding the prefunding requirement and running its own health insurance program, USPS said it can save $7.1 billion per year in health-related expenses.
As part of the plan, USPS also would ask Congress to allow the agency to move to a five-day delivery schedule, which it said will produce $2.7 billion in annual savings.
USPS said the five-day schedule — together with a proposed lowering of First Class service standards and broad-based network restructuring — would allow USPS to eliminate a total of 155,000 full-time positions by the end of fiscal 2016. The plan calls for cutting as many as 66,000 slots this year, and another 51,000 in 2013.
USPS noted that out of the current complement of 550,000 full-time employees, 283,000 are eligible for retirement — nearly twice the number of positions slated for elimination in the plan.
The Postal Service noted that all of the elements of the five-year plan would have to fall into place for it to work as intended.
“A central tenet of the plan is that success is not dependent upon achieving a mix or subset of reforms,” said a USPS press release. “The scale of the financial challenge requires that all the major elements be pursued concurrently and fully executed within a short window of opportunity.”