I am a retired Postal employee and on the W-2 that i received no Oregon State taxes were withheld. Is Oregon taxes exempt from federal retirement?

You would report a 1099-R for your federal retirement. According to the OR-17, the tax on a federal pension is as follows: 

"You may be able to subtract some or all of your taxable federal pension included in federal income. This includes benefits paid to the retiree or the beneficiary. It doesn’t include disability payments if you haven’t attained the minimum retirement age. The subtraction amount is based on the number of months of federal service or points earned for retirement before and after October 1, 1991:

• If all of your months of federal service occurred or points were earned before October 1, 1991, subtract 100 percent of the taxable federal pension income you reported on your federal return.

• If you have no months of service or points earned before October 1, 1991, you can’t subtract any federal pension.

• If your service occurred or points were earned both before and after October 1, 1991, you will subtract a percentage of the taxable federal pension income you reported on your federal return. To determine your percentage, divide your months of service or points earned before October 1, 1991, by your total months of service or points earned. Round your percentage to three places (example: 0.4576 = 45.8%). Once you determine the percentage, it will remain the same from year to year."

http://www.oregon.gov/DOR/programs/individuals/Pages/collections.aspx

This answer may also be of interest to you:

https://ttlc.intuit.com/replies/5196773