Letter carriers union says fixing pension errors will solve USPS’ financial woes

WASHINGTON – NALC President Fredric V. Rolando issued the following statement today in response to proposed measures to solve the USPS’ budget deficit, including rate increases and cutting Saturday delivery:

“What is at stake here is finding a long-term, common sense solution to the financial problems plaguing the Postal Service. The answer does not reside with penny-wise, pound-foolish service cuts, as proposed by the USPS. Neither is it to be found by making false and misleading claims about postal labor costs to avoid a postage rate increase, as some mailers are now doing. Of the options under consideration to solve the Postal Service’s financial crisis, the smartest solution is to reform the congressional mandate to massively pre-fund future retiree health benefits.

“The Postal Service is mandated by law to meet an aggressive pre-funding payment schedule of future health benefits for retirees. No other American entity in the public or private sector is required to pre-fund retiree health benefits. The Postal Service has already set aside more than $35 billion, enough to cover retiree health benefits for 15-20 years.

“Additionally, the Postal Service has been overcharged by $50-$75 billion for benefits Civil Service Retirement System (CSRS) benefits, according to the findings of both the USPS Office of the Inspector General and the Postal Regulatory Commission. Without these burdens, the Postal Service would have been profitable in three of the past four years. If these burdens were eliminated altogether, the Postal Service would be able to pay down its outstanding operational debt and focus on strengthening and adapting its business model.

“The Postal Service has reviewed its operations repeatedly over the past three years and has reacted quickly to the changing economic landscape. Jointly with the NALC, it has evaluated and adjusted letter carrier routes four times in the past 18 months. These hard-nosed reviews have saved the Postal Service over a billion dollars and have significantly reduced its workforce while it reached record levels of productivity. Indeed, the Postal Service now employs nearly 100,000 fewer career employees than it did before the recession began.

“To make this a labor issue ignores the larger financial issues at play. We are committed to making changes that are in the best interest of consumers. But to address the problem, we should not resort to knee-jerk reactions and criticisms. The long-term solution is to urge Congress to lift the inequitable pre-funding obligation and refunding CSRS over-payment burdening the Postal Service so it can operate profitably.”