B. LEAVE PROGRAMS

Postal Service employees are provided both annual and sick leave at the same rates as other federal sector employees. However, Postal Service employees have a higher annual leave carryover limit. Earned annual leave may be donated to other career or transitional employees who have exhausted their own leave due to serious health conditions, and postal employees donated more than 196,631 hours of annual leave in 2005.

Postal Service career nonbargaining-unit employees and some bargaining-unit employees may participate in a leave exchange program, which allows a portion of annual leave that would otherwise be earned in the following year to be exchanged for cash. In 2005 approximately 22,780 employees participated in the leave exchange program.

Under the Family and Medical Leave Act eligible employees may take up to 12 weeks off from work for covered conditions. Employees may use annual leave, sick leave, or leave without pay for covered conditions in accordance with applicable collective bargaining agreements and current leave policies. The Postal Service allows the use of 80 hours of accrued sick leave for dependent care under a policy applicable to all career employees.

C. HEALTH INSURANCE

During 2005 health care contributions, including Medicare taxes for current employees, totaled $5.1 billion, 9.46 percent of the Postal Service's total pay and benefits. The Postal Service continued to pay most of the premium cost of employee health benefit coverage. When career employees enroll in Federal Employee Health Benefits, 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 2005 was almost $1.5 billion. The Postal Service is the only federal agency to directly fund retiree health benefits.

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 2005 the Postal Service cost for employee life insurance was $196 million, and the cost of funding life insurance for postal annuitants and their survivors was $11 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 2005 there were 704,716 career postal employees covered by federal retirement programs. Of this total, 524,118 employees (74 percent) were covered by the Federal Employees' Retirement System (FERS); 171,958 employees (25 percent) were covered by the Civil Service Retirement System (CSRS), and 8,640 employees (1 percent) were covered by CSRS Offset. Postal Service career employees make retirement contributions to the Civil Service Retirement and Disability Fund. In 2005 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). The Postal Service is the only agency to fully fund the costs of its CSRS pension obligations.

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 2005, 411,633 FERS employees and 105,131 CSRS and CSRS Offset employees participated in the TSP. In addition, during 2005, the Postal Service administered the TSP Catch-Up provision for eligible TSP participants age 50 and older. This program allowed an additional $4,000 of tax deferred basic pay to be contributed to the TSP. In 2005 there were 27 thousand FERS employees and 27 thousand 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 2005, 81,069 employees were enrolled in health care FSAs (a 12.4 percent increase from 2004), with an average annual contribution of $1,747. At the end of 2005, 5,986 employees were enrolled in dependent care FSAs (a 9.8 percent increase from 2004), with an average annual contribution of $2,463. Employees experience tax savings which vary according to the individual's contribution amounts and marginal tax rates.