APWU Web News Article 069-2010, July 19, 2010

The APWU is praising a bill introduced by Rep. Stephen F. Lynch (D-MA), which is designed to restore financial stability to the Postal Service. The legislation (H.R. 5746) would modify the formula for funding the Civil Service Retirement System (CSRS), and would rectify overpayments to the CSRS by the Postal Service ranging from $50 billion to $75 billion.

“I urge APWU members to contact their U.S. representatives immediately and ask them to co-sponsor this important legislation,” said union President William Burrus.

The bill (The United States Postal Service’s CSRS Obligation Modification Act of 2010) would alter the methodology used to determine the allocation of costs for retirement benefits between the federal government and USPS. Under current law, the costs are disproportionately split between the two, to the disadvantage of the Postal Service.

The USPS Office of Inspector General (OIG) concluded in a January 2010 audit that the Postal Service had overpaid approximately $75 billion for employees who spent part of their career working for the old Post Office Department before the USPS was established. An independent study performed by the Segal Group, which was commissioned by the Postal Regulatory Commission (PRC), likewise found that the current methodology was not “fair and equitable,” but concluded that the disparity was between $50 billion and $55 billion.

H.R. 5746 would require the Office of Personnel Management (OPM) to conduct a review to determine whether the USPS has overpaid CSRS; if OPM determines that the USPS has overpaid, the surplus would be transferred into the Postal Service Retiree Health Benefits fund. This provision would lessen the severe burden imposed on the USPS by the requirement in the Postal Accountability and Enhancement Act (PAEA) to “pre-fund” future retiree health benefits.

The pre-funding requirement, combined with the economic downturn, has prompted the Postal Service to propose severe cutbacks in service, such as closing stations and branches, consolidating installations, and eliminating Saturday mail delivery.

“This bill could go a long way to alleviating the Postal Service’s financial difficulties,” said Legislative and Political Director Myke Reid. “We urge union members to get active right away in support of this legislation.”

The House subcommittee on the Federal Workforce, Postal Service and District of Columbia, which Lynch chairs, may vote on the bill as early as July 21.