Union objects to Postal Service plan to withdraw from FEHBP

Tuesday - 3/27/2012, 10:53am EDT

Fred Rolando, president of the National Association of Letter Carriers

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The Postal Service is on Capitol Hill today pitching its strategy to withdraw employees from the federal health insurance program.

The financially struggling agency said it could save $7 billion a year by setting up its own plan.

But one postal union is saying the Postal Service should stay in the Federal Employees Health Benefits Program.

"We don't believe it's necessary to achieve the savings that are there [by staying in FEHBP]," said Fred Rolando, president of the National Association of Letter Carriers, in an interview with The Federal Drive with Tom Temin and Emily Kopp.

Meanwhile, the Senate was going to consider a comprehensive bill to overhaul the Postal Service, but lawmakers have postponed that debate for now.

Rolando said the postponement of this bill is good news because the proposal did not have a "long-term plan" for the future of the Postal Service, Rolando said. The Senate bill would allow the USPS to offer buyouts to reduce staff by as much as 100,000 and to negotiate a new health insurance plan. The proposal also would end Saturday delivery.

The proposals put forth so far merely try to dismantle the Postal Service, Rolando said.

"The key is to maintain the network that you need to grow the business," he said.

Whatever the solutions are, they will have to address USPS' mandate to prefund its future retirees' health benefits, which costs the Postal Service between $5 and $8 billion each year, Rolando said. In the short-term, the Postal Service can dip into its surplus, Rolando said. For example, USPS has a surplus of $12 billion in the Federal Employees Retirement System, he said.

"I think that's plenty of cash to get them through the next year while we figure out what we need to do to restructure and come up with a business plan," he said.

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