OPM’s Response to the Postal Regulatory Commission Regarding USPS CSRS Overpayments:

Legislative History
OPM determines the Postal Service’s responsibility for CSRS costs in accordance with current law. OPM’s methodology is based on the determinations made by prior Congresses that the Postal Service is responsible for CSRS costs attributable to pay increases granted by the Postal Service. Congress first established this policy in 1974, under Public Law 93-349, and no subsequent legislation has established an alternative policy. To recap, in 2003, Congress directed OPM to make changes to the accounting of Postal Service CSRS obligations that led to a $78 billion decrease in future Postal CSRS funding payments. Then in 2006, Congress directed OPM to change how military service costs should be allocated under CSRS that led to a $28 billon adjustment. In both cases, the magnitude of the adjustment was understood by Congress when the laws were passed. It appears to OPM that when Congress intends to make adjustments of the magnitude suggested by the Segal report, it does so by taking specific legislative action.

Redetermination Provisions
We believe that the implication that OPM has the discretion to make basic changes in the allocation method between the Postal Service and the Treasury goes beyond the intent of, and the authority provided to OPM in, the 2006 Postal Accountability and Enhancement Act. That law included a provision, section 802(c), allowing the Postal Service to appeal to OPM its annual detemlination of the Postal Service CSRS supplemental liability under 5 U.S.c. 8348(h)(I).

Section 802(c) provides in pertinent part:

(A) Request for review.–Notwithstanding any other provision of this section (including any amendment made by this section), any determination or redetermination made by the Office of Personnel Management under this section (including any amendment made by this section) shall, upon request of the United States Postal Service, be subject to a review by the Postal Regulatory Commission under this subsection.

Footnote 1 of the PRC transmittal indicates that their action is based upon:

Request of the United States Postal Service for the Commission to Conduct a Review Pursuant to PAEA Section 802(c) ofOPM Determinations Regarding CSRS, February 23,2010; Clarification of Request of the United States Postal Service for the Commission to Conduct a Review Pursuant to PAEA Section S02(c) of OPM Determinations Regarding CSRS, March 2, 2010.

Conclusion
After careful review by counsel, we have concluded that OPM does not have the authority to make a reallocation in the manner suggested in the Segal report. However, if Congress determines that another methodology is more appropriate, OPM will of course comply with any changes in the current law.

Once again, thank yOu for the opportunity to provide our views. Copies of this letter will be furnished to the relevant committees of the Senate and House of Representatives, and to the United States Postal Service.

read full letter