Few Likely to Step Up for USPS Employee Buyout Offer

Desperate to cut costs, the U.S. Postal Service is hoping to generate early employee retirements. The USPS this week finalized an agreement with two of its employee unions to offer select workers a financial incentive to retire or resign before the end of the current fiscal year, which ends Sept. 30.

The one-time offer aims to accelerate targeted staffing reductions for employees represented by either the American Postal Workers Union (APWU) or the National Postal Mail Handlers Union (NPMHU). As many as 30,000 employees could take advantage of the incentive offer, which Postal Service officials say could save the USPS as much as $500 million next year.

But Bob McLean, executive director of the Mailers Council, doesn’t think enough eligible employees will step up for the incentive. “The offer may persuade a few employees who were seriously contemplating retirement to go ahead and process their retirement paper work,” he says. But it’s doubtful that the offer will result in a high number of people choosing to leave the Postal service, he says.

Eligible employees would receive $10,000 to be paid during the first three months of fiscal 2010, creating salary and benefit savings for the ensuing nine months. The same workers would receive a second payment of $5,000 in fiscal year 2011. The majority of employees eligible for the incentive work in mail processing facilities.

If the economy were in better shape, more postal workers might take advantage of the program, McLean says. “I think many postal employees are still concerned about the overall economy, and their chances of finding part-time employment after they have retired from the Postal Service.”

USPS’s cost savings during fiscal 2009 are expected to total more than $6 billion. According to a July 14 letter to Congress, Postmaster General Jack Potter said the USPS expects to lose approximately $7.1 billion by the end of fiscal 2009.