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Postal Service Offers $15,000 Early-Retirement Incentives

Oct. 1 (Bloomberg) -- The U.S. Postal Service, which may have lost $15 billion in the fiscal year that ended Sept. 30, offered $15,000 apiece to members of its biggest union to retire.

About 114,000 American Postal Workers Union members are eligible for the incentive, according to a Postal Service fact sheet. That’s about 22 percent of the service’s 530,000-person workforce.

“We have no idea how many people are going to take advantage of the offer,” Mark Saunders, a Postal Service spokesman, said in an interview today. “It’s a personal decision.”

About 165,000 postal employees, or 31 percent of the workforce, are eligible for full retirement, Postmaster General Patrick Donahoe said in August.

The service, which last week defaulted on a payment due to the U.S. Treasury for future retiree health benefits, is trying to cut $20 billion in annual operating costs by 2015 through steps that include reducing its workforce and closing processing plants.

In 2009, the service offered a $15,000 early-retirement incentive to the same union and one representing mail handlers, leading 20,876 people to accept, Saunders said.

Representative Elijah Cummings, the top Democrat on the House Oversight and Government Reform Committee that oversees the Postal Service, praised the offer and said Congress must also pass a postal overhaul bill.

“I applaud the efforts by the U.S. Postal Service and the American Postal Workers Union to responsibly and compassionately reduce their workforce in line with declining mail volumes,” Cummings, of Maryland, said in an e-mailed statement.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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