APWU Web News Article 027-2013, March 11 , 2013

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.

—————————————————–

Mr. LYNCH introduced the following bill; which was referred to the Committee on Oversight and Government Reform

To amend title 5, United States Code, to provide for the computation of normal-cost percentage for postal employees as a separate and distinct class, and to provide for the disposition of certain excess retirement contributions made by the United States Postal Service.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `United States Postal Service Stabilization Act of 2013′.

SEC. 2. SEPARATE NORMAL-COST PERCENTAGE.

(a) In General- Section 8423(a)(1) of title 5, United States Code, is amended–

(1) in subparagraph (A)–

(A) by striking `subparagraph (B))’ and inserting `subparagraph (B) or (C))’; and

(B) by striking `and’ at the end;

(2) in subparagraph (B), by striking the period and inserting `; and’; and

(3) by adding at the end the following:

`(C) the product of–

`(i) the normal-cost percentage, as determined for employees of the United States Postal Service (and the Postal Regulatory Commission), multiplied by

`(ii) the aggregate amount of basic pay payable by the United States Postal Service (and the Postal Regulatory Commission), for the period involved, to its employees.’.

(b) Effective Date- The amendments made by subsection (a) shall be carried out as soon as practicable, except that contributions shall be set in accordance with such amendments not later than the first applicable pay period beginning in the first fiscal year beginning at least 180 days after the date of the enactment of this Act.

SEC. 3. DISPOSITION OF CERTAIN EXCESS CONTRIBUTIONS.

(a) In General- Section 8423(b) of title 5, United States Code, is amended by adding at the end the following:

`(6)(A) If, for any fiscal year to which this paragraph applies, the amount determined under paragraph (1)(B) is less than zero (hereinafter in this paragraph referred to as `excess postal contributions to FERS’), such amount shall be treated in accordance with the following:

`(i) In the case of the first fiscal year to which this paragraph applies and for which excess postal contributions to FERS are determined, the amount of such excess contributions shall be transferred by the Secretary of the Treasury to such account as the Secretary considers appropriate so that such amount may be used for the payment of obligations issued by the United States Postal Service under section 2005 of title 39.

`(ii) In the case of any subsequent fiscal year to which this paragraph applies and for which excess postal contributions to FERS are determined, the amount of such excess contributions shall be transferred by the Secretary of the Treasury to the account to which are credited any Government contributions which are made by the United States Postal Service under section 8334(a)(1)(B) (or which would be made, but for clause (ii) thereof).

`(B) This paragraph applies to the fiscal year last ending before the date of the enactment of this paragraph and each fiscal year thereafter.

`(C) In the case of any transfer under subparagraph (A)(ii) for a fiscal year corresponding to a fiscal year for which a determination of Postal surplus or supplemental liability is scheduled to be made under section 8348(h), the transfer under subparagraph (A)(ii) shall be made before such determination under section 8348(h) is made.’.

(b) Conforming Amendment- Section 8348(h)(1)(B)(iii) of title 5, United States Code, is amended by striking `principles.’ and inserting `principles, including any amounts described in section 8423(b)(6)(A)(ii).’.