American Postal Workers Union National Presidents Conference February 28, 2009 Washington, DC H.R. 235 Myke Reid, Legislative Director Steve Albanese, Assistant Director Judy Beard, Retirees, Director

H.R. 235 Title: To amend title II of the Social Security Act to repeal the Government pension offset (GPO), and windfall elimination provisions (WEP). Short Title: Social Security Fairness Act Rep. Howard Berman (CA) introduced bill on January 7, 2009 Has 194 cosponsors in the House of Representatives Currently referred to House Committee on Ways and Means

Government Pension Offset (GPO) Provision Affects Civil Service Retirement System Retirees by reducing and some times eliminating Social Security survivor benefits if a spouse receives a CSRS pension

Government Pension Offset (GPO) Provision GPO Reduction is 2/3 of individuals public pension –Example: If spousal/CSRS pension is $3,000/mo. Social Security: $1,000/mo. 2/3s of pension would be $1,000 This reduces spousal income to $0

Government Pension Offset (GPO) Provision Exceptions –Eligible for CSRS spousal pension before December 1, 1982 and meet all of 1977 Spousal Social Security rules

Windfall Elimination Provision (WEP) Reduces Social Security benefits of CSRS Retirees who have worked outside of the federal sector in a job where Social Security taxes were deducted –Requirements for Social Security 62 years old, minimum of 40 credits. (Can earn up to 4 credits per year) Must have job where employee paid Social Security taxes for at least 10 years or 40 quarters

Windfall Elimination Provision (WEP) WEP Reduction is based on a modified formula used to calculate Social Security benefits –More than 55% reduction –Example: Someone expecting $545.40/mo. end up with just $242.40/mo.

Windfall Elimination Provision (WEP) Exceptions –Retired before January 1, 1986, or –Have 30 years or more of substantial coverage (Some relief for those years)

Related Senate Legislation Senator Diane Feinstein introduced bill S. 484 on February 25, 2009 Has ten cosponsors in the Senate Referred to the Senate Committee on Finance

American Postal Workers Union National Presidents Conference February 28, 2009 Washington, DC Stimulus Payments and Tax Breaks for CSRS & FERS Retirees Myke Reid, Legislative Director Steve Albanese, Assistant Director Judy Beard, Retirees, Director

American Recovery and Reinvestment Act Signed by President Obama on February 17, 2009 Provides economic relief for those under the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS)

American Recovery and Reinvestment Act CSRS Retirees relief will be a refundable tax credit of $250 for this year FERS Retirees will be eligible for a one- time payment of $250

American Recovery and Reinvestment Act Originally only the Senate-passed bill included the $250 credit/payment for Retirees receiving Social Security –Excluded CSRS federal Retirees who are not collecting Social Security

American Recovery and Reinvestment Act A thank you is extended to Sen. John Kerry (D-Mass.), Sen. Max Baucus (D- Mont.), and Rep. Charlie Rangel (D-NY) for their efforts in creating the tax credit and successfully attaching it to the stimulus legislation

APWU LEGISLATIVE DEPARTMENT MYKE REID, LEGISLATIVE AND POLITICAL DIRECTOR STEVE ALBANESE, ASSIST. LEGISLATIVE AND POLITICAL DIRECTOR FEBRUARY 28, 2009 FMLA Presentation Highlighting THE BUSH CHANGES 15

The law used to provide that any prior employment in your lifetime with the same employer would count toward the 1 year of employment rule. Now if there is a break of 7 or more years the prior employment does not count toward this eligibility test. THE ONE YEAR RULE 16

OVERNIGHT HOSPITAL STAY ABSENCE OF MORE THAN THREE FULL CALENDAR DAYS PLUS TREATMENT WITHIN 30 DAYS PREGNANCY CHRONIC CONDITIONS REQUIRING TREATMENTS PERMANENT LONG TERM CONDITIONS REQUIRING SUPERVISION MULTIPLE TREATMENTS (NON CHRONIC) SERIOUS HEALTH CONDITIONS ( ) 17

Because of the changes made effective by President Bush on January 16, 2009 the DOL has developed new forms. The law allows employees to use ANY form that provides the required information. WE HAVE DEVELOPED NEW APWU FORMS THAT WE BELIEVE CONTAIN ALL OF THE INFORMATION REQUIRED BY THE STATUTE. If you submit a form that management claims is missing information they must provide you 7 days to cure the discrepancy. NEW DOL FORMS 18

Another change in regulations may require the employees doctor to review the job requirements when declaring a person unable to work due to a FMLA condition. The new DOL forms now allow the employer the option to provide information on duties and physical requirements of the workers job to the Doctor when processing a FMLA request. JOB REQUIREMENTS 19

The new regulations now require that an employee describe the medical necessity for taking leave to care for their family member on an intermittent basis. Examples would be assistance with nutritional needs, safety concerns, hygiene, transportation for treatment, medical needs and/or psychological support. INTERMITTENT LEAVE FOR FAMILY MEMBER 20

A period of incapacity of more than three FULL CALENDAR consecutive days that also involves: Treatment two or more times by a health care provider WITHIN 30 DAYS Treatment ONCE by a Health care provider within 7 days of the start of the absence which results in a regimen of treatment under his supervision e.g. Therapy, prescribed medication or follow up exams Absence Plus Treatment 21

While Serving in active duty a veterans family may take up to 12 weeks of FMLA to take care of family matters (QUALIFYING EXIGENCIES)caused by the veterans absence (APWU FORM 3) When returning from active duty an eligible veteran is entitled to up to 26 weeks of FMLA for MEDICAL treatment of service connected conditions. Eligible family members who assist in that recovery are also allowed up to 26 weeks of leave (APWU FORM 4) Military Service FMLA 22

12 additional weeks Short notice on deployment Military Events and related activities Childcare and school activities Financial and Legal arrangements Counseling Rest and Recuperation Post deployment activities Additional related activities MILITARY EXIGENCIES 23

Combined total of 26 weeks per year (for all types of FMLA) Spouse, parent, son, daughter, next of kin Outpatient care Inpatient care Rehabilitation Recuperation Counseling and therapy Military Caregiver 24

The Health Portability and Accountability Act (HIPAA) prohibits health care providers from disclosing medical information without the permission of the patient. Therefore before medical information can be disclosed to the employer the employee must sign a release. HIPAA RULES UNCHANGED 25

Under the new rules workers can be asked to disclose their medical diagnosis but they cannot be forced to divulge it. Under the new rules FMLA Coordinators, Health care officials employed by USPS, Human Resource professionals, leave administrators or any management official can contact a workers Doctor without the knowledge or consent of the worker in certain situations for verification of authenticity or clarification. The workers supervisor is however prohibited from such contact. MEDICAL PRIVACY 26

OTHER ISSUES c Now allows employers to ask for semi annual certifications even when the condition is life long allows the employer to charge missed mandatory OT hours allows employers to enforce their own leave regulations such as call in procedures that shorten the former 1-2 day rule on reporting an absence expands time from for employer to act on an FMLA request from 2 days to 5 days 27

The APWU has concerns over some of the changes implemented by President Bush. We have contacted the transition team of President Obama as well as the new congressional leadership. We will work to reverse those changes as soon as possible but in the meantime we must comply with the regulations as modified. If you speak to your representative you should ask them to support efforts to reverse the regressive Bush changes OUR CHALLENGE 28

Legislative Issues Employee Free Choice Act Stop Outsourcing Postal Work USPS Finances – HR 22 Sick Leave Credit for FERS Employees

H.R Introduced by Rep. Stephen Lynch When significant contracting is considered by USPS, bill requires USPS to collectively bargain with the unions.

USPS - Government Relations, December 2008 The Postal Service is under serious financial strain due to challenging economic conditions that continue to reduce mail volume. A combination of factors has lead to the severity of the economic climate: Year over year fuel price increases Increases in the cost of paper Uncertainty in the financial markets Increased diversion of hardcopy messages to the Internet Continued increase in USPS expenses in pay and benefits

The Postal Service, Congress, and the rest of the postal community recognize that it is in a precarious financial condition. The public debate is whether to file an exigent rate case, reopen the political compact that led to the PAEA and release it from its obligation to fund future health benefit premiums, cut back on the frequency of delivery, or drastically reshape the Postal Services workforce.

USA Today, Gallup - Feb 1, 2009 What would you most like to see done to help the Postal Service out of its financial difficulties? Cut services such as Saturday delivery, or closing post offices Provide government funding Raise rates

USPS Revenue Fiscal Year Net income RevenueExpensesDebt 20051,44569,99368, ,81771,9172, (5,142)74,97380,1154, (2,806)74,96877,7747,200

Form 8-K, Filed with PRC, 2/19/2008

GAO - GAO T What GAO Found In fiscal year 2008, mail volume fell by 9.5 billion pieces, fuel prices increased by over $500 million, and cost-of-living allowances for postal employees increased costs by over $560 million. Cutting costs by $2 billion – primarily by cutting over 50 million work hours – did not close the gap between revenues and expenses. Thus, USPS recorded a loss of $2.8 billion for fiscal year Its debt increased by $3 billion by the end of the year to $7.2 billion. USPSs outlook for fiscal year 2009 has become more pessimistic. USPS projects a volume decline of 10 billion to 15 billion pieces, another loss, and $3 billion more in debt. At this pace, USPS could reach its $15 billion statutory debt limit by fiscal year 2011.

What GAO Found, pt 2 Two areas for further action to reduce costs include compensation and benefits, which is close to 80 percent of its costs, and mail processing and retail networks. Accelerated volume declines and changes in the publics use of mail indicate that USPS needs to move beyond incremental efforts and take aggressive action to streamline its workforce and network costs to assure its long-term viability.

GAO Proposed Options Work with unions to modify work rules: One option that would not require congressional action is similar to actions taken by other financially stressed entities, whereby USPS and its unions could agree on ways to achieve additional short-term savings, such as by modifying work rules to facilitate reducing work hours.

Options, pt. 2 Another option would be for USPS to close unnecessary retail facilities, and by reducing the number of facilities, USPS could lower the costs of maintaining its network of facilities. USPSs network of retail facilities has been largely static despite population shifts and changes in mailing behavior. In considering options to provide retail services at a lower cost, it is important to note that large retail facilities – generally located in large urban areas – generate much larger costs for the retail network than the smallest rural facilities and may therefore potentially generate more cost savings. Closing postal facilities is often controversial but is necessary to streamline costs. Congress encouraged USPS to expeditiously move forward in its streamlining efforts in PAEA. We recommend that USPS enhance transparency and strengthen accountability of its realignment efforts to assure stakeholders that realignment would be implemented fairly and achieve the desired results.

Postal Civil Service Retirement System Funding Reform Act of 2003 In 2002, OPM found USPS overfunding by $78 billion. Required no rate increase for 2 years. Required USPS to pay down debt. Pre-funding current employees retiree health benefits.

PAEA Retiree Health Costs 8089.a. Postal Service Retiree Health Benefit Fund (a) There is in the Treasury of the United States a Postal Service Retiree Health Benefits Fund which is administered by the Office of Personnel Management. (3)(a) The United States Postal Service shall pay into such fund – (i)$5,400,000,000, not later than September 30, 2007; (ii)$5,600,000,000, not later than September 30, 2008; (iii)$5,400,000,000, not later than September 30, 2009; (iv)$5,500,000,000, not later than September 30, 2010; (v)$5,500,000,000, not later than September 30, 2011; (vi)$5,600,000,000, not later than September 30, 2012; (vii)$5,600,000,000, not later than September 30, 2013; (viii)$5,700,000,000, not later than September 30, 2014; (ix)$5,700,000,000, not later than September 30, 2015; and (x)$5,800,000,000, not later than September 30, 2016.

Pre-FundingPremium Payments Total 2009$5.4$2.3$ $5.5$2.6$ $5.5$2.9$ $5.6$3.3$ $5.6$3.6$ $5.7$4.0$ $5.7$4.4$ $5.8$4.8$10.5 Total$44.8$28.1$72.9

HR 22 Introduced by – –Rep. John McHugh (R-NY) –Rep. Danny Davis (D-IL) Provides that funding come from RHBF through Cosponsors To amend chapter 89 of title 5, United States Code, to allow the United States Postal Service to pay its share of contributions for annuitants' health benefits out of the Postal Service Retiree Health Benefits Fund.

Cosponsors of HR22 AbercrombieBacaBartlettBerryBishop BoozmanBorenBoswellBraleyBurton CarnahanCarneyChandlerCleaverConyers CourtneyDavis, D.Davis, S.Diaz-BalartEdwards, C. EllisonFilnerFoster, B.GordonHalvorson HareHastingsHersethHincheyHolden HondaKagenKapturKildeeKucinich LathamLofgrenMassaMcGovernMichaud MillerMooreMurphy, C.MurthaOberstar PastorPingreePlattsRehbergRoe Ros-LehtinenRoybal-AllardSestakSimpsonSpace TerryThompson, B.Thompson, M.UptonVisclosky WalzWexlerWoolseyYoung, C.W.

Credit for Sick Leave Accumulation HR 958 Rep. Jim Moran (D-VA) FERS employees use more sick leave Currently, 75% of employees are FERS 14 cosponsors

CSRSFERSDifference Eligible to retire Nearly *eligible Other * Eligible within 2 years Average Amount of Sick Leave Used (Hours) Per Year

Cosponsors of HR958 Connolly (D-VA)Lofgren (D-CA) Edwards (D-DC)McGovern (D-MA) Ellison (D-MN)Petri (R-WI) Frank (D-MA)Ruppersberger (D-MD) Hare (D-IL)Sarbanes (D-MD) Holt (D-NJ)Wolf (R-VA) Israel (D-NY)Woolsey (D-CA)

Omnibus Budget Reconciliation Provided further, That 6-day delivery and rural delivery of mail shall continue at not less than the 1983 level.

Bad News in Presidents Budget Mandatory and Receipt Proposals Postal Service: Realign USPS employee/employer benefit contributions

United States Senate (Current Makeup)

U.S. House (current makeup)