Offering workplace benefits such as health and retirement programs and paid vacations is a well established way to attract and retain talented workers. But the structure of these offerings has been changing in the public and private sectors over the past 20 to 30 years for several reasons, including rising pension debts; a more mobile workforce; and a move towards simplified administration of benefits.

Employers have been looking to shed excessive pension expenses and give workers more control over their own retirement programs. Increasingly, private, local, and state employers are moving away from defined benefits plans that generally pay a guaranteed sum based on wages and years of service. They are increasingly favoring defined contribution plans, such as the 401(k) plan, a pretax fund built on employee and employer contributions. Meanwhile, retirement benefits plans for federal workers, including postal employees, have generally remained unchanged since the Federal Employees Retirement System was enacted in 1987.

Similarly, the U.S. Postal Service’s leave benefits have stayed primarily the same for decades. Days off are organized into categories – annual, personal, sick, military (if applicable), and federal holiday – and the rate of leave accrual depends on the category. When taking leave, a postal employee has to indicate which category the leave falls into. But many companies are moving toward fewer categories, such as just vacation days and sick days. This simplified approach cuts down on administrative costs.

As the Postal Service looks for ways to tighten its belt, it is considering changes in benefits, such as a new retirement program for future workers. But it is in a bit of a Catch-22. It is required to offer compensation and benefits that are comparable to those in the private sector, but it cannot change its benefits programs unilaterally, due to legal requirements and union agreements.

At the request of the Postal Service, we issued two white papers that benchmarked its benefit programs against those of several comparable organizations. Specifically, we looked at retirement benefits and leave policies. We found many similarities in benefit offerings, but key differences, too. For example, retirement expenses make up a larger portion of total benefits for the Postal Service than for the other organizations we studied. Also, postal employees can carry over 55 or more days of annual leave each leave year and an unlimited number of sick days. But the other organizations had far more restrictive leave carryover.

Share your thoughts or experiences on leave programs that consolidate all days off into one comprehensive plan. Might such a program for postal employees offer flexible benefits while reducing costs? Or does the current system work well? What changes, if any, are needed to the Postal Service’s retirement plans? 

Comments (8)

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  • anon

    Every business should follow the FLSA rules. Take the time to look over FLSA compliance policies and practices. I have read that FLSA does not require salary raises, but it only requires that non-exempt employees be paid no less than the federal minimum wage for each hour worked.

    Sep 22, 2014
  • anon

    Such a lovely sharing! I found this blog very informative and helpful.

    Jul 23, 2014
  • anon

    Just because corporate america has thrown their employees under the bus doesn't mean usps has to. Now the screaming is that government employees have so many benefits compared to private business. Why? Because private businesses have been dismantling all of the programs for employees. Corporations used to consider employee welfare as a noble goal. That is no longer the case. To paraphrase JFK. As not why government employees have good benefits, rather ask why corporations are not matching or surpassing these benefits for their own employees.

    Jun 03, 2014
  • anon

    What about the bonuses management receives? Surely, that would be an excellent place to start in order to save money. Cut out the waste instead of punishing the people that actually keep the place running!

    May 30, 2014
  • anon

    On the one hand I am fully behind paying the true price for doing business. On the other hand I think that the government should be a model employer. I don't think the government should be looking to see what a money making business is doing to make more money for the big wigs by taking it out on the little guy aka, the employee. Thus, I don't think your encouraging the USPS to model itself after a money grubbing business is well advised. Perhaps reducing benefits is the right answer, but I needs to be evaluated in terms of what will make the business viable in the long run, and balanced against other measures that do not cut directly into the little guy's hide. It should not be presented like 'well that's the way everyone else is doing it'. What kind of leader does that? If you feel this is really necessary, then at the very least the USPS needs to be a leader in educating employees about what they need to do to ensure they have a comfortable retirement. I fear for years from now when with this attitude of 'you are on your own for retiremen', and no one planned, that everyone is going to be sucking off the government because they are in poverty. Unfortunately people don't seem to be able to be trusted to do what it right in the long run. The vast majority of people think of today and today only. They 'want' a latte today, and don't think about the 'need' of food on the table in retirement!!

    May 29, 2014
  • anon

    I guess this means discussion on “innovation” and “good ideas” is over now. When is the follow-up on “postal services” for the "underbanked"? eCheckCard, Or SureMoney Worldwide? Those would be more interesting for postal topics ... unless your an Issocrite. Lower volume in First-Class Mail shouldn't signal the great demise of a vibrant and self-supporting service and a decent career for its workforce. FERS already offers a balanced approach between institutional costs and employee out-of-pocket expenses. And speaking of annual leave: is max 55-days annual leave carryover that bad of an incentive for employees to start "saving" leave? What about sick-leave usage steadily decreasing since federal employees are 'empowered' to earn credit on it. Employees who have less paid time-off tend to increase unscheduled absences, which in turn add to operational disruptions, increased cost, and lower quality of service . Further corroding postal employees benefits will do nothing more than continuing the wave of privatization cannibalism eating away at the middle-class living standards. I'm sure Issa is satisfied now. Good job ladies and gents … good job!

    May 29, 2014
  • anon

    It depends on how important the mail is to the country. How many hard working, dedicated employees are going to want to work nights, weekends, and holidays in a factory doing physically difficult work for poor benefits? And work for unprofessional managers?

    May 28, 2014
  • anon

    You don't mention what company you compared the usps to. Was it ups or mcdonalds? How about congress? Or how about usps management in d.c.? Usps has lowered the starting wage for new employees and now you want to cut their retirement too, now that's COLD! Why don't you compare the cost of management( wages, benefits, ratio of management to employees)? I don't think we need to attack the craft employees when management spends 3 million on a golf tournament, and abuses their company travel cards!( with no one being fired for their abuses) Anyway, back to comparing companys. Ups has a higher wage, better retirement, and makes a profit. What's the difference between the two? Professional management for one.

    May 28, 2014

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