XI. Postal reform — implications for 2014 and beyond

In FY2013, the Postal Service continued to face an ongoing fiscal and liquidity crisis. Volume continues to decline due to electronic diversion of mail; there is a slow economic recovery from the Great Recession; there is a fixed cost base since the Postal Service must provide consistent pricing and service for all 50 states plus territories; prices are capped by inflation; and labor and benefits costs per hour, which are approximately 80 percent of total Postal costs, continue to rise. Although the Postal Service has taken steps to reduce the number of employees, consolidate plants and operate more efficiently, legislative action is still required to enable the Postal Service to regain financial self-sufficiency.

Key initiatives requested by the Postal Service that are being considered by Congress include:

• Restructure the U.S. Postal Service health care plan for employees and retirees.
• Refund Federal Employees Retirement System (FERS) overpayment and adjust future FERS payment amount.
• Adjust Delivery Frequency to six-day packages/five-day mail.
• Streamline the governance model (eliminate duplicative oversight).
• Provide authority to expand products and services.
• Require defined contribution retirement system for future Postal employees.
• Require arbitrators to consider the financial condition of the Postal Service.
• Reform Workers’ Compensation.

The Postal Service remains committed to being a responsive, valuable organization that supports the needs of all of our customers, employees and other stakeholders. We will transform ourselves to meet the challenge of the digital age and continue to support communications and commerce domestically and internationally.