President Louis M. Atkins regarding the USPSâ€™ termination of their payments into FERS
June 22, 2011 â€” The U.S. Postal Service announced on June 22 that it immediately will suspend its bi-weekly contributions to the Office of Personnel Management (OPM) for Federal Employees Retirement System (FERS) benefits, citing overpayment of its FERS obligations by enough of a margin to where a nearly $7 billion surplus currently exists.
For months the Postal Service has indicated that its worsening financial condition will put at risk its ability to satisfy a series of financial obligations, including a statutorily-required advance payment of $5.5 billion in late September for future retiree health benefits along with fulfilling other basic operating expenditures. The termination of the FERS payments is the first in a series of last-ditch efforts by the USPS to remain financially solvent.
The National Association of Postal Service believes the Postal Service’s actions underscore the critical need for Congress to address the Postal Service’s pension surpluses in both CRS and FERS. Surpluses as large as $75 billion in CSRS and $7 billion in FERS may exist.
While the legality of the Postal Service’s action is unclear, USPS and OPM have agreed to seek legal review through the Office of Legal Counsel at the Department of Justice. If the Postal Service has erred, it will make the necessary catch-up payments.
In the meantime, OPM and USPS will continue to award full service credit for employees retiring from the Postal Service, regardless of the state of USPS-employer contributions to FERS. NAPS will continue to work to assure that the interests of its members and their retirement benefits are fully protected.