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2013 Report on Form 10-K United States Postal Service 30
In order to encourage attrition, we have periodically offered targeted separation incentives to employees who agreed to
retire or resign within a specified time period. These incentives have targeted postmasters, mail handlers, administrative
employees, and those covered by collective bargaining agreements. Incentives are an effective approach to reducing
career complement to better match workload and are highly cost-effective, as the cost of the incentive is offset by the cost
savings in a matter of months. The incentives offered over the past three years are outlined in the table below.
Separation Incentives
FY
Initiated Impacted Employee Class
Total
Monetary
Incentive Employees
Accepted Charge
Recorded
2013
APWU Employees
$
15,000
(a)
22,842
$351 million
2012
Postmasters
$
20,000
(b)
4,275
Mail Handlers
$
15,000
(b)
2,925
$135 million
2011
Administrative Employees
$
20,000
2,000
$40 million
(a) A payment of $10,000 was made on May 24, 2013 and $5,000 will be paid on May 23, 2014.
(b) Made in two equal installments on December 21, 2012 and December 20, 2013.
On September 7, 2013, we announced a Voluntary Early Retirement (VER) option for approximately 15,600 eligible
managers, supervisors, and local postmasters. Employees who accept the option will not receive any financial incentive to
retire. Eligible employees must accept the offer by November 29, 2013 and can choose whether to leave by December
31, 2013, or January 31, 2014. There is no impact to the financial results for the year ended September 30, 2013 as a
result of this VER. However, as noted in the table above, we have accrued $351 million and $135 million for separation
incentives during the years ended September 30, 2013 and 2012, respectively.
Work hours are an important driver of compensation expense. As illustrated in the chart above, since 2000, work hours
have decreased each year except for 2005, when we witnessed a slight increase. Since 2000, work hour reductions have
been the single biggest contributor to the ongoing achievement of savings targets. Over that period of time, we have
eliminated 516 million work hours, or 31.7%, worth almost $22 billion in annual savings. Work hour reductions are tied to
the complement levels, and are the primary method of reducing costs associated with operational initiatives and declining
mail volumes.
Total work hours continue to decrease despite annual increases in the number of delivery points. The number of delivery
points increased by approximately 774,000 in 2013 and 655,000 in 2012. The growth rate of new delivery points has
slowed in recent years, compared to pre-recession levels, due to lower housing starts.
Work Hours by Function
(Work Hours in thousands) 2013 2012 2011 2013/2012 2012/2011
City Delivery
393,986
389,219
399,010
1.2%
(2.5%)
Mail Processing
203,802
210,170
215,221
(3.0%)
(2.3%)
Rural Delivery
176,697
177,715
177,384
(0.6%)
0.2%
Customer Service Operations
138,477
144,309
150,203
(4.0%)
(3.9%)
Postmasters
56,028
58,429
59,484
(4.1%)
(1.8%)
Other*
140,841
142,309
147,535
(1.0%)
(3.5%)
Total Work Hours 1,109,831 1,122,151 1,148,837 (1.1%) (2.3%)
* Including Vehicle Services, Plant Maintenance, Operational Support, and Administration.
% Change