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Chapter 1 Compliance with Statutory Policies
3. EXECUTIVE PAY AND BENEFITS
Due to the limit imposed on PCES salaries by the Postal Reorganization Act, pay and benefits for many Postal Service officers and executives do not meet comparability standards. However, within these statutory salary limitations, the Postal Service continues to provide performance-driven pay actions in support of its goal to enhance the performance-based culture.
4. PAY-FOR-PERFORMANCE
All phases of the Pay-for-Performance (PFP) merit program are fully automated in the Performance Evaluation System. More than 73,000 EAS and PCES employees now participate. PFP enables employees to concentrate on achievements within their control and their specific responsibilities within the organization. Employees learn at the beginning of the evaluation period where priorities lie and what is expected of them. PFP introduces a heightened awareness of performance distinctions, and individuals are recognized for the contributions they make to unit and corporate performance. Automatic or across-the-board pay increases have been eliminated for all executives and nonbargaining employees.
B. LEAVE PROGRAMS
Postal Service employees are provided both annual and sick leave at the same rates as other federal sector employees. However, postal 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. This year employees donated more than 236,500 hours of annual leave.
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. Approximately 22,800 employees participated in the leave exchange program.
Under the Family and Medical Leave Act (FMLA) 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 in accordance with applicable collective bargaining agreements and current leave policies. Postal Service FMLA policy applicable to all career employees allows the use of 80 hours of accrued sick leave for dependent care.
C. HEALTH INSURANCE
The Postal Service paid health care contributions for current employees totaling $5.3 billion representing 7.4% of the Postal Services 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 the Federal Employee Health Benefits Program, their share of health benefit premium contributions is automatically made with pretax payroll deductions.
Under the Omnibus Budget Reconciliation Act of 1990, the Postal Service is required to fund a share of Federal Employee Health Benefit premiums for retirees. The Postal Services cost of funding health care benefits for postal annuitants and their survivors in 2006 was $1.6 billion. The Postal Service is the only federal agency to directly fund retiree health benefits.
D. LIFE INSURANCE
Life insurance coverage for postal employees is provided through the Federal Employees Group Life Insurance program. The Postal Service assumes the full cost of basic life insurance for eligible employees. The Postal Services cost for employee life insurance was $200.1 million. The Postal Services cost for funding life insurance for postal annuitants and their survivors was $15.7 million.
E. RETIREMENT SYSTEMS
Postal employees, like other federal career employees, are covered by the Civil Service Retirement System (CSRS), the Federal Employees Retirement System (FERS), or CSRS Offset — all administered by the Office of Personnel Management. The 696,138 employees covered by these federal retirement programs at the end of 2006 were as follows:
INSERT TABLE 1-3 HERE| Retirement Contribution | ||||
|---|---|---|---|---|
| Retirement Plan | Employees | % of Employees | Retirment Fund | Social Security |
| CSRS | 157,945 | 22.7 | 7.0% of basic pay | NA |
| FERS | 530,043 | 76.1 | 0.8% of basic pay | 6.2% of gross pay |
| CSRS Offset | 8,150 | 1.2 | 0.8% of basic pay | 6.2% of gross pay |
Career employees covered by FERS and by CSRS Offset and noncareer employees are also subject to Social Security taxes. The cost to the Postal Service of paying the employer share of Social Security taxes for current employees was $1.8 billion.
CSRS and FERS both exceed the private sector comparability standard but are required benefits under the Postal Reorganization Act. Factors that contribute to the generosity of these plans include the prescriptive nature of the pension entitlement formula, the availability of full benefits as early as age 55, and the full or nearly full indexing of benefits to inflation. 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. As of the end of 2006, 96,532 CSRS and CSRS Offset employees and 419,731 FERS employees were participating in the TSP. During 2006, the Postal Service administered the TSP Catch-Up provision for eligible TSP participants age 50 and older. This program allowed an additional $5,000 of tax deferred basic pay to be contributed to the TSP. At the end of 2006, 7,730 CSRS and CSRS Offset employees and 11,357 FERS employees were participating in the TSP Catch-Up program.
The Postal Service makes agency contributions to the TSP for employees covered by FERS. The Postal Service cost for TSP agency contributions for current employees was $960 million.