The 2019 Trump Budget Proposal Affecting Retirees’ Future

(This article is credited to Thomas R. Benson, President of Lake Geauga Area Local 1204, Director of Veteran Affairs , OPWU)

The United States Postal Service at one time was one of the best federal jobs an individual could get. I can remember a time when a couple hundred applicants would come and take the civil service exam at one time hoping to land a job at the Post Office. The benefits we receive at the USPS are among the best in the country out of any employer. Those benefits such as retirement pension (30% of your high 3 years) , matching contributions to your TSP, to some of the best health insurance plans in the country, make the USPS a very good place to work and build a career. Over the years we have seen different administrations and congress try to cut many of these benefits we enjoy. Most recent attack comes from the 2019 Trump Budget Proposal.  The following information was researched and gleaned from several websites and other sources.

In the budget proposal the attacks on the employee and the benefits they enjoy come from several different angels. Let’s start with an increase to FERS contributions. For active federal and postal employees covered by the Federal Employees Retirement System (FERS), the budget calls for gradually equalizing employee and agency payroll contributions for pension benefits. This would cut pay and raise our pension contributions by 1 percent of pay per year for up to six years.

Next the budget calls for reducing Civil Service Retirement System (CSRS) and FERS pension benefits for new retirees by basing annuities on workers’ highest average pay over five years (high-5) instead of over the highest three years (high-3). So to make this easier to understand, currently your “ pension “ from the USPS is based on your high 3 years. The budget would change that to your high 5 years.

For all retirees, the administration’s budget calls for eliminating or reducing cost-of-living adjustments (COLAs). For current and future annuitants under FERS (which covers any employee hired after 1984), the budget would eliminate basic annuity COLAs entirely.

The administration is also said to be studying a policy to end the defined benefit portion of FERS for all new federal employees, leaving new employees with only the Thrift Savings Plan (TSP), the defined contribution plan for FERS participants.

For both active and retired federal employees, the budget proposes decreasing the federal government’s contribution to the Federal Employees Health Benefits Program (FEHBP) to 65 to 75 percent, down from the current 72 to 75 percent range. The impact of the FEHBP proposal would be minimal in the near term, since contribution levels are set during contract negotiations. But this change would drive the Postal Service to continue to try to shift costs to employees during collective bargaining.

FERS employees are covered by a three-part retirement system – an annuity, Social Security, and the Thrift Savings Plan. Social Security benefits aren’t payable before age 62, there for law provides a bridge payment for FERS employees who retire before that age. It’s called the special retirement supplement. The Budget Proposal targets the Special Retirement Supplement and would be eliminated for those employees who retire before Social Security eligibility age.

These attacks aren’t new to the postal worker. They do happen rather frequently but most times we don’t hear too much about the fight as we had many in congress working with the National Unions. In the past, changes to federal employee pay and benefits excluded the postal worker. There has been this movement in the past few years to include the postal workers in all the governmental changes. Many in congress would like to see union representation taken out of government employment including the USPS. Often times I’ve heard members tell me how changes won’t affect them. I believe the changes that the 2019 Trump Budget Proposal will affect every employee whether newly hired or soon to retire.   The time has come that every APWU member needs to contact their legislators and demand that they keep their hands off our earned benefits.  This isn’t just about benefits, it’s about each and every employees livelihood.

What are your thoughts?

This site uses Akismet to reduce spam. Learn how your comment data is processed.