From the American Postal Workers Union:
Rep. Stephen Lynch (D-MA) introduced the Postal Service Stabilization Act (H.R. 961) on March 5, a measure that would enhance the financial viability of the USPS. The bill would require the Office of Personnel Management (OPM) to recalculate the Postal Service’s pension liabilities to the Federal Employees Retirement System (FERS) using postal-specific salary and demographic assumptions.
“OPM does not currently take into account the unique position, salary growth, and demographic characteristics of postal employees in examining whether a FERS surplus exists,” Rep. Lynch said. Because OPM uses government-wide, rather than postal-specific assumptions, the agency has been understating the FERS surplus that could be returned to the Postal Service, he said. Rep. Lynch is the Ranking Democrat on the House Oversight and Government Reform Subcommittee on the Postal Service.
The bill would return overpayments to the Postal Service to pay its outstanding financial obligations. It also would express the intent of Congress that postal-specific assumptions should apply to allocations of past, present, and future benefit liabilities between the USPS and the Treasury.
OPM’s funding estimates for FERS have shown a persistent surplus since 1992, according to a study performed at the request of the USPS Office of Inspector General. The review, conducted by the Hay Group, shows the primary cause of the surplus is that postal salary growth has been lower than OPM’s assumptions. Because the OPM calculation overstates the amount needed to provide FERS pensions for postal employees, USPS historically overpays its share of pensions into retirement accounts maintained by OPM. The study recommends using Postal-specific assumptions to estimate the FERS liability.
“We wholeheartedly support passage of H.R. 961and we thank Rep. Lynch for introducing it,” said Legislative and Political Director Myke Reid.
APWU President Cliff Guffey also praised the Postal Service Stabilization Act. “We applaud his bill,” he said. “It would enhance the financial viability of the Postal Service by allowing the agency to use billions of dollars in pension overpayments without cutting worker pay or benefits or demolishishing service. And for the first time, it would require OPM to use postal specific assumptions in calculating the amount of any existing surplus,” he said.