The Postal Service's request for legislative change to its payment schedule for current and future retiree health benefits remains under consideration in Congress. In response to a November 25 letter from Senators Lieberman, Collins, Carper, and Coburn, the Postmaster General responded on December 3 with a detailed report on how the Postal Service plans to stabilize its financial situation in the near term. A copy of the Senators' letter and key parts of the Postmaster General's response accompany this newsletter.
As we said in the last edition of the Alliance Report, the Postal Service pays approximately 10 percent of its revenue for retiree health benefits. While this obligation protects the American taxpayer down the road, it also burdens the Postal Service and its customers with a massive cost in this economic environment that is, frankly, a recipe for disaster.
In 2002 it was discovered that the Postal Service had overpaid its employee retirement account administered by the Office of Personnel Management (OPM). Corrective legislation changed the payment stream to the retirement fund and allowed the Postal Service to keep the overpayment for one year. That led to the Postal Service delaying a planned general postage rate increase. However, after the temporary relief the new law called for the continuation of the overpayment into an escrow account until such time that additional legislation directed how the money would be used.
The Postal Service, as required by law, submitted a plan to Congress that called for one third of the overpayment going into escrow to be used to fund retiree health benefit costs, and the other two thirds for paying Postal Service operational costs. That proposal was not accepted and, instead, the entire amount of the overpayment, or "savings" as some called it, was directed to be used for current and future retiree health benefit costs.
Under the current 10 percent of annual revenue payment requirement, the Postal Service is the poster organization for aggressively funding retiree health benefit obligations. It is safe to say that no other private or public organization has such a funding requirement. Few could survive today's economic conditions with such a requirement.
The Postal Service's request for some relief is reasonable and quite necessary. We encourage the Congress to take action that will give the Postal Service and its customers a fighting chance to survive in these difficult times.
Three-Phase Plan for IMB Rolled Out by Postal Service
The Postal Service announced a three-phase roll-out plan for Intelligent Mail Barcode (IMB) implementation at the recent Mailers Technical Advisory Committee meeting.
The first phase in May 2009 will provide the ability to receive and process electronic documentation using Postal Wizard and mail.dat, with the exception of manifest mailings. The Postal Service will be testing in March and April in preparation for the May 2009 start. May 18 is the date testing will begin for mailers.
In September, a second phase will support mail.dat for batch and itemized manifest mailings as well as mail.xml 6.0. Pre-production testing will occur in August and early September, with mailer testing beginning on September 13.
The third phase will occur sometime in late Fall of 2009, when a price incentive for Full Service IMB usage is supposed to be recognized. The Full Service discounts are still unknown, but are expected to be announced as part of the rate changes to be released in February 2009.
The Postal Service is committed to increasing its customer support services for IMB through training of its Business Mail Acceptance, Business Service Network, and Postal One! Help Desk staff. There are also plans to update and replicate the
As of November 28 there is a new version of the Guide to Intelligent Mail for Letters and Flats available at http://www.ribbs.usps.gov/files/fullserviceguides/. Also available since November 28 is the PostalOne! Technical Guide for mail.xml 6.0 and PostalOne! Techinical Guide for Data Distribution and Reporting for Full-Service. In addition, a Guide to Customer Supplier Agreements version 2 is now available at the Ribbs website.
Move Update Changes Go Into Effect, Sort Of
The Postal Service's new Move Update requirements went into effect on November 23 but many critical issues are yet to be resolved. As a result, the 7 cents per bad address penalty will not be imposed until the Postal Service works through many important questions and concerns. In the meantime, for the latest requirements and other Move Update information go to www.ribbs.usps.gov.