US Postal Service 2009 Annual Report Download - page 47

2009 Annual Report United States Postal Service | 45
Workhours by Function
(workhours in thousands)
2009 2008 2007
City Delivery 424,683 452,288 462,040
Mail Processing 251,200 293,108 315,825
Customer Services & Retail 190,749 217,236 233,791
Rural Delivery 181,090 189,950 189,709
Other, Including Plant, Operational
Support, and Administrative 210,303 220,772 221,636
Total Workhours 1,258,025 1,373,354 1,423,001
Rural delivery hours decreased in 2009 despite the addi-
tion of over 600,000 new rural delivery points. Rural car-
rier workhour reductions were driven primarily by the mail
count evaluations that were implemented in April 2009.
These mail counts reduced weekly rural carrier evaluated
workhours by 154,000 hours, or 4.3%, per week. This
change directly refl ected the reduction in mail volume from
the previous year. The total number of new delivery points
was also dramatically lower in 2009 and is a direct refl ec-
tion of the weak economy, with lower housing starts and
housing sales.
Workhour Reductions
(hours in millions)
-120
-100
-80
-60
-40
-20
0200920082007
-115
-50
-36
In 2008, total workhours decreased by 50 million hours
compared to 2007, partially offsetting higher labor rates.
Mail processing, customer service and city delivery work-
hours collectively decreased by 50 million. Rural delivery
increased 0.2 million workhours in 2008, driven by the ad-
dition of almost 710,000 new rural delivery points.
Workhours have been reduced in nine of the last ten years,
with only 2005 showing a slight increase. Since 2002,
workhour reductions have been the single biggest con-
tributor to the ongoing achievement of savings targets.
RETIREMENT EXPENSE
Employees participate in one of three retirement programs
of the U.S. government, based on the starting date of their
employment with the federal government. These programs
are the Civil Service Retirement System (CSRS), the Dual
CSRS/Social Security System (Dual CSRS) and the Fed-
eral Employees Retirement System (FERS). The programs
are administered by the Offi ce of Personnel Management
(OPM). The funding requirements and timing of employer
and employee contributions into the programs can be al-
tered at any time with the passage of a new law or an
amendment of existing law by Congress and signed by the
President. See Note 11, Retirement Programs, in the Notes
to the Financial Statements for additional information.
All expenses of our retirement programs, except for retiree
health benefi ts, are included in compensation and benefi ts
expense. Retirement expenses represented 8.2% of to-
tal operating expenses in 2009, 7.6% in 2008 and 7.2%
in 2007. Retirement expense of $5,917 million for current
employees was $18 million, or 0.3%, greater than the
2008 expense of $5,899 million. The small change in 2009
is primarily a result of the decreasing size of the workforce
which offset the rising cost per employee. The retirement
expense increase of $162 million in 2008 relative to 2007
was attributable to the higher employer contributions re-
sulting from higher average wage rates in 2008, largely
due to COLAs.
As described in Note 3, Summary of Signifi cant Account-
ing Policies, in the Notes to the Financial Statements, we
account for our participation in the retirement programs of
the U.S. government under multi-employer plan account-
ing rules, in accordance with Accounting Standard Codi-
fi cation (ASC) 715 (formerly FAS 87, Employers’ Account-
ing for Pensions). Although the Civil Service Retirement
and Disability Fund (CSRDF) is a single fund and does not
maintain separate accounts for individual agencies, P.L.
109-435 requires us to make certain disclosures regarding
obligations and changes in net assets as if the funds were
separate. All of the following information is provided by
OPM and represents the most recent data available (i.e.,
actual data as of September 30, 2008) with projections to
September 30, 2009.
FUNDING STATUS
The following table provides OPM’s estimation of the fund-
ing status of the CSRS and FERS programs for Postal Ser-
vice participants as of September 30, 2008, and 2007,
and the projected Postal Service obligation as of Septem-
ber 30, 2009.