New Chair, Old Problems for USPS

The requirement to prefund future retirees' health benefits helped push the Postal Service to a $15.9 billion record net loss for FY2012 as first class mail revenue continued to fall.

The U.S. Postal Service recorded a record net loss, $15.9 billion, during fiscal year 2012, triple the previous year's net loss of $5.1 billion. But the alarming 2012 total for one of the largest federal employers included $11.1 billion related to two payments to prefund future retirees' health benefits, a congressionally mandated action that USPS leadership has long warned threatens its survival. The agency's Nov. 15 announcement put it this way: "The Postal Service, which is uniquely required by law to prefund these obligations, was forced to default on these payments."

The announcement said productivity reached a record level as work hours were reduced by 27 million hours in FY2012 from the year before, representing a 2.3 percent decline. USPS would not have been profitable without the prefunding, but it would have posted a loss of only $2.5 billion. It package business continues to grow, but the drop in first class mail revenue outpaced it during FY2012.

"It's critical that Congress do its part and pass comprehensive legislation before they adjourn this year to move the Postal Service further down the path toward financial health," Postmaster General and CEO Patrick Donahoe said. "We continue to do our part to grow revenue and reduce expenses by making our operations more efficient and by providing our customers with new and expanded services to meet their mailing and shipping needs. Additionally, through the expanded use of technology, including better use of digital tools, and mobile technology, we are providing business mailers with new opportunities to connect with customers in a more individualized way." USPS has proposed a plan to sponsor its own health care program, shed itself of the prefunding problem, offer non-postal products and services, have authority to determine delivery frequency, and take other steps to solve its financial problems.

The American Postal Workers Union, one of the two largest USPS unions, announced Nov. 1 that postal employees it represents will get their first raise in three years effective Nov. 17, with the 1 percent raise for career employees being reflected in Dec. 7 paychecks. APWU President Cliff Guffey pointed out the raise is significant because the same law that requires USPS to prefund health benefits for future retirees, the Postal Accountability and Enhancement Act of 2006, bars USPS from raising postage rates above the rate of inflation.

A new chairman was elected Nov. 15 for the USPS Board of Governors, Mickey D. Barnett, and James H. Bilbray was elected vice chairman. Barnett, the board's current vice chairman, is an attorney and former New Mexico state senator who was appointed by President George W. Bush on Aug. 17, 2006 for a term that expires Dec. 8, 2013. Bilbray is an attorney and former member of the U.S. House of Representatives from Nevada, appointed by the same president in August 2006.

Download Center

  • Safety Metrics Guide

    Is your company leveraging its safety data and analytics to maintain a safe workplace? With so much data available, where do you start? This downloadable guide will give you insight on helpful key performance indicators (KPIs) you should track for your safety program.

  • Job Hazard Analysis Guide

    This guide includes details on how to conduct a thorough Job Hazard Analysis, and it's based directly on an OSHA publication for conducting JHAs. Learn how to identify potential hazards associated with each task of a job and set controls to mitigate hazard risks.

  • A Guide to Practicing “New Safety”

    Learn from safety professionals from around the world as they share their perspectives on various “new views” of safety, including Safety Differently, Safety-II, No Safety, Human and Organizational Performance (HOP), Resilience Engineering, and more in this helpful guide.

  • Lone Worker Safety Guide

    As organizations digitalize and remote operations become more commonplace, the number of lone workers is on the rise. These employees are at increased risk for unaddressed workplace accidents or emergencies. This guide was created to help employers better understand common lone worker risks and solutions for lone worker risk mitigation and incident prevention.

  • EHS Software Buyer's Guide

    Learn the keys to staying organized, staying sharp, and staying one step ahead on all things safety. This buyer’s guide is designed for you to use in your search for the safety management solution that best suits your company’s needs.

  • Vector Solutions

Featured Whitepaper

OH&S Digital Edition

  • OHS Magazine Digital Edition - June 2022

    June 2022

    Featuring:

    • SAFETY CULTURE
      Corporate Safety Culture Is Workplace Culture
    • HEAT STRESS
      Keeping Workers Safe from Heat-Related Illnesses & Injuries
    • EMPLOYEE HEALTH SCREENING
      Should Employers Consider Oral Fluid Drug Testing?
    • PPE FOR WOMEN
      Addressing Physical Differences
    View This Issue