Benefits August 11, 2011

Postal Service Wants to Withdraw from Federal Retirement Plan

August 11, 2011 (PLANSPONSOR.com) - The U.S. Postal Service is seeking to withdraw its employees from the health and retirement plans that cover federal staffers and create its own benefit programs for postal employees.
Reported by

The Washington Post reports that the USPS also wants to reduce its workforce by 20%, including through layoffs now prohibited by union contracts. These moves would need congressional approval and would face fierce opposition from postal unions.  

In a notice to employees informing them of its proposals, with the headline “Financial crisis calls for significant actions,” the Postal Service said “we will be insolvent next month due to significant declines in mail volume and retiree health benefit prefunding costs imposed by Congress,” according to the Post.  

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

A spokeswoman for Senator Thomas R. Carper (D-Delaware) said “he is particularly interested in learning whether these proposals would be fair to employees and effective in reducing the Postal Service’s costs.” Representative Darrell Issa (R-California), chairman of the House Oversight and Government Reform Committee, said: “These new ideas from the Postal Service are worth exploring. Options for reform and cost savings that will protect taxpayers from paying for a bailout, now or in the future, need to be on the table.”   

However, postal worker unions have said they will fight the proposals.  

The USPS has already suspended its contributions to the Federal Employees Retirement System (see Postal Service to Suspend Retirement Contributions). 

Benefits August 11, 2011

Study Finds Increased Interest in Voluntary Benefits

August 11, 2011 (PLANSPONSOR.com) - Thirty percent of U.S. employers (10 employees or more) said they are considering adding a new voluntary benefit option within the next two years, according to a new LIMRA report.
Reported by

Voluntary Worksite Benefits: Penetration and Market Potential (2011) indicates almost one-third of all employers are considering offering new voluntary benefits to replace existing employer-paid and contributory benefits – where the employer pays some of all of the costs.  Half of large firms (1,000 or more employees) show interest in transitioning their existing benefits to voluntary, which is significantly higher than smaller-sized firms.     

The two benefits that are most likely to be shifted to voluntary arrangement are medical and prescription drug plans.   Of those employers considering adding a voluntary major medical or prescription benefit, the study revealed that three of four may be adding the voluntary benefit to replace their existing medical or prescription benefits.  Employers appear considerably less likely to similarly replace other benefits.    

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The study confirmed that life and cancer insurance remain the most commonly offered voluntary benefits. More than 300,000 businesses offer each product type to their workforce.   Voluntary long-term and short-term disability insurance products are also very popular, with more than 20% of companies offering these benefits to their employees.   

Vision (20%) and dental (19%) remain the most common voluntary benefits on employer radar.  Interest in most products has risen, at least somewhat, from 2006 levels, and is greater at businesses that are not current worksite marketing clients.

«