Drastic cuts to postal employees’ wages and benefits are included within the White House’s fiscal year 2021 budget released on Monday, February 10. While the White House estimates its budget would save the Postal Service $97 billion over the next 11 years, it would be done so at the expense of its employees.
The FY21 budget takes direction from the 2018 Postal Task Force Report by calling for utilizing the private sector for mail sorting and processing, taking away jobs from union members. Impacting the mission of the Postal Service directly, the budget and the Task Force propose changing universal service obligations by reducing delivery frequency and providing access to the mailbox. The budget and the Task Force also attack union rights, calling for aligning the Postal Service with the rest of the federal workforce, which would mean moving away from collective bargaining rights over pay.
Current and retired employees would see negative impacts to both Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) benefits. Similar to language seen in previous White House budgets, the FY21 plan calls for changes to FERS and CSRS benefits. FERS employees would see an increase of contributions by 1% every year until it is equal to the contributions of the federal government; an elimination of the FERS supplement for those who retire before the age of 62; and elimination of cost of living adjustments (COLAs). CSRS retirees would face a reduction of COLAs by 0.5%. Further damaging to retirees, the FY21 budget utilizes a “high 5” instead of a “high 3,” using the highest five salary years to calculate annuities instead of the current highest three salary years. Finally, the budget calls to reduce the TSP G Fund interest rate, a change which has been decried as it creates a G Fund that is ineffective for investors and does not generate the budgetary savings promised.