The Postal Service continued to pay most of the premium cost of employee health benefit coverage. When career employees enroll in approved plans, their share of health benefit premium contributions are automatically made with pretax payroll deductions.

Under the Omnibus Budget Reconciliation Act of 1990, the Postal Service is required to fund a share of the annuitants' Federal Employee Health Benefit premiums. The cost of funding health care benefits for postal annuitants and their survivors in 2004 was $1.3 billion.

d. Life Insurance

The Federal Employees' Group Life Insurance program provides life insurance coverage for Postal Service employees. The Postal Service assumes the full cost of basic life insurance for eligible employees. During 2004 Postal Service costs for employee life insurance were $191.9 million, and the cost of funding life insurance for postal annuitants and their survivors was $9.5 million.

e. Retirement Systems

Postal Service career employees, like federal career employees, are covered by one of three retirement systems administered by the Office of Personnel Management.

At the end of 2004 there were 707,485 career postal employees covered by federal retirement programs. Of this total, 509,577 employees (72 percent) were covered by the Federal Employees' Retirement System (FERS); 188,670 employees (26.7 percent) were covered by the Civil Service Retirement System (CSRS), and 9,238 employees (1.3 percent) were covered by CSRS Offset.

Postal Service career employees make retirement contributions to the Civil Service Retirement and Disability Fund. In 2004 CSRS employees contributed 7.0 percent of basic pay to the Fund. FERS and CSRS Offset employees contributed 0.8 percent of basic pay to the Fund and 6.2 percent of gross pay to Social Security (up to the Social Security wage maximum).

f. Thrift Savings Plan

All career employees may participate in the Thrift Savings Plan (TSP), which is administered by the Federal Retirement Thrift Investment Board. At the end of 2004, 413,286 FERS employees and 115,358 CSRS and CSRS Offset employees participated in the TSP.

In addition, during 2004, the Postal Service administered the TSP Catch-Up provision for eligible TSP participants age 50 and older. This program allowed an additional $3,000 of pre-tax basic pay to be contributed to the TSP. In 2004 there were 12,279 FERS employees and 11,580 CSRS and CSRS Offset employees who participated in the TSP Catch-Up program.

g. Flexible Spending Accounts

Employees continue to take advantage of flexible spending accounts (FSAs) to pay for certain health care and dependent care expenses with contributions made through pretax payroll deductions. FSAs were first offered in 1992 to certain nonbargaining unit employees and now include all employees. In 2004, 72,117 employees were enrolled in health care FSAs (a 19.1 percent increase from 2003), with an average annual contribution of $1,665. At the end of 2004, 5,454 employees were enrolled in dependent care FSAs (an 11.4 percent increase from 2003), with an average annual contribution of $2,487. Employees experience tax savings which vary according to the individual's contribution amounts and marginal tax rates.

4. Environment

a. Employee Assistance Program/Workplace Environment Improvement

The Postal Service Employee Assistance Program (EAP) provides free, voluntary, confidential, in-person counseling services to employees and family members from masters qualified, professional-level counselors. Counselors are available 24-hours-a-day, seven-days- a-week, in convenient locations to assist employees and family members with difficulties that affect their personal lives and their work, including emotional, financial, legal, chemical dependency, marital, and family problems.

EAP also provides consultation to managers and supervisors regarding not only individual workers but also the work setting within which they function. The EAP intervenes, when appropriate, through preventive efforts, such as manager coaching and educational seminars on communication and stress management. EAP also provides ameliorative efforts that include conflict resolution sessions and organizational interventions and restorative actions, such as debriefings after a critical incident (e.g., suicide, hurricane, armed robbery, and accidental death). In 2004, more than 57,600 employees and their family members received counseling and consultation from the EAP. Of those employees 30.6 percent reported some type of work problem that affected their work performance.