FERS ISSUE
Postal Employees Are Not Immune To This Recession
The Postal Service’s $2.8 billion loss last year is the subject of many articles and much publicity, and the reason the agency now is offering up to 30,000 postal employees buyouts for voluntary resignation and early retirement. Employees that take this option will receive up to $15,000 in two payments: $10,000 this coming October, and the remainder in October 2010. This plan purportedly will save the USPS nearly $500 million in the next year.
Among those eligible for early retirement are Post Office retail clerks, distribution center mail handlers and motor vehicle technicians. However, the buyout option is not being made available to letter carriers due to the tremendous growth of new postal addresses.
It is indisputable that the USPS had to do something to offset the enormous losses they’ve suffered as a result of a steady decline in mail volume. It has been estimated that their year-end loss could total up to $7 billion, and some have linked that loss with the approximate $7 billion that USPS must pay into current and future retiree health benefits. In addition to the buyouts, USPS will be closing nearly 300 post offices nationwide.
This year alone, the USPS has cut over 100 million work hours, instituted a hiring freeze, and stopped construction of several new projects.
Postal employees eligible for this buyout are those who already are eligible for retirement or are eligible for an early retirement beginning 2008, and those employees willing to voluntarily resign. Although the lump-sum payments being offered as an incentive to retire might seem appealing, they could be significantly less than full retirement benefits since retirement benefits are based in large measure on the number of years in service. The fewer years in the federal work-force, the less retirement benefits received. This may pose a dilemma for some who had calculated their monthly retirement benefits based upon leaving the work-force at age 65. Less money will undoubtedly mean making life style adjustments.
It should be noted that federal employees who may be eligible for early retirement and who currently are working with a physical or psychological disability may be eligible for a disability annuity. However, they should consult with an attorney knowledgeable in FERS disability law.
Federal Pay Raises Could Be Less Than Expected
It now has been a year since, by most accounts, the U.S. economy teetered on the brink of a second “Great Depression.” Stocks were in free fall, the housing bubble burst, and foreclosures were rapidly on the rise. Unemployment, already high in 2007, spiraled to levels we hadn’t seen in decades.
Although it seems as if the economy may now be on the mend, most analysts predict that it still could be quite a while before jobs, salaries and consumer confidence return to normal levels. In addition to affecting private sector business, the realities of the current economy are affecting the federal work place. On August 31, 2009, President Barack Obama sent a letter to leaders of Congress lowering the 2010 annual pay increase to federal employees to 2%, down from the 2.4% originally budgeted.
He cites “serious economic conditions” as the basis for this decrease, and says: “This total Federal employee pay increase could cost (if implemented) about $22.6 billion in fiscal year 2010,” a cost, according to the President’s argument, the U.S. economy cannot afford.
In his letter to Congressional leaders, President Obama says, “”Title 5, United States Code, authorizes me to implement an alternative pay plan if I view the adjustments that would otherwise take effect as inappropriate due to national emergency or serious economic conditions affecting the general welfare . . . A national emergency, within the meaning of chapter 53 of Title 5, has existed since September 11, 2001 . . . The growth in Federal requirements is straining the Federal budget. Full statutory civilian pay increases costing $22.6 billion in 2010 alone would put even more stress on our budget.”
Congress does have the authority to override the President’s decision.
Disabled Federal Employees Need To Pay Attention To Deadlines
If you are a federal employee seeking to file a disability claim, you should know that one of the most crucial details of this process is to meet all deadlines. For sure, failure to meet a filing deadline can mean the difference between a successful outcome and an unsuccessful one.
After meeting the criteria necessary to file a disability retirement claim, you must make sure that if you have been separated from service for more than 31 days, your disability retirement application is received by the Office of Personnel Management (OPM) within one year after the date of your separation. (For example, if you are separated from service from October 1, 2009 through October 31, 2009, OPM must receive your application no later than October 1, 2010.)
The reason for this, according to the OPM, is that if you have been separated from service for more than 31 days, your former employer may not have all of your personnel records readily available, and may not be able to process them in enough time to submit them to OPM on your behalf.
According to the OPM: The one-year time limit for applying for disability retirement is established by law. Waiver of that time limit is permitted only if you were mentally incompetent to file within the established time frame. Failure to follow instructions or unfamiliarity with applicable law and regulation is not as basis for waiving the time limit.
President Obama On Health Care Reform
Recently, President Barack Obama addressed a joint session of Congress to make his case for health care reform, as if a case, indeed, had to be made. The President began by describing a man from Illinois who lost his health coverage in the midst of chemotherapy treatment. He died as a result. The President spoke of a woman in Texas whose insurance company cancelled her policy just before she was to undergo a double mastectomy for breast cancer. By the time her insurance was reinstated, the cancer had doubled in size.
President Obama also discussed the extraordinarily high cost of health care and its negative impact on American industry – a factor that hinders our manufacturers from fair competition in international markets. And, the President outlined his plan for health care reform. Here are excerpts from President Obama’s address to Congress and to the nation:
What this plan will do is to make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there’s no reason we shouldn’t be catching diseases like breast cancer and colon cancer before they get worse. That makes sense, it saves money, and it saves lives.
That’s what Americans who have health insurance can expect from this plan – more security and stability. Now, if you’re one of the tens of millions of Americans who don’t currently have health insurance, the second part of this plan will finally offer you quality, affordable choices. If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage. We will do this by creating a new insurance exchange – a marketplace where individuals and small businesses will be able to shop for health insurance at competitive prices. Insurance companies will have an incentive to participate in this exchange because it lets them compete for millions of new customers. As one big group, these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable insurance. It’s how everyone in this Congress gets affordable insurance. And it’s time to give every American the same opportunity that we’ve given ourselves.
For those individuals and small businesses who still cannot afford the lower-priced insurance available in the exchange, we will provide tax credits, the size of which will be based on your need.
And all insurance companies that want access to this new marketplace will have to abide by the consumer protections I already have mentioned. This exchange will take effect in four years, which will give us time to do it right. In the meantime, for those Americans who can’t get insurance today because they have pre-existing medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill. This was a good idea when Senator John McCain proposed it during the campaign, it’s a good idea now, and we should embrace it.
Now, even if we provide these affordable options, there may be those – particularly the young and healthy – who still want to take the risk and go without coverage. There may still be companies that refuse to do right by their workers. The problem is, such irresponsible behavior costs all the rest of us money. If there are affordable options and people still don’t sign up for health insurance, it means we pay for those people’s expensive emergency room visits.
If some businesses don’t provide workers health care, it forces the rest of us to pick up the tab when their workers get sick, and gives those businesses an unfair advantage over their competitors. And unless everybody does their part, many insurance reforms we seek – especially requiring insurance companies to cover pre-existing conditions – just can’t be achieved.
That’s why under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers. There will be a hardship waiver for those individuals who still cannot afford coverage, and 95% of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements. But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Improving our health care system only works if everybody does their part.