The Postal Regulatory Commission on June 30 submitted a report to Congress, the Office of Personnel Management (OPM) and the U.S. Postal Service that shows the USPS was overcharged at least $50 billion for payments to the Civil Service Retirement System (CSRS) from 1972 to 2009.
The independent study, conducted by The Segal Co., reveals that an adjustment of between $50 billion and $55 billion should be made in favor of the USPS.
The Segal Co. study was commissioned after a report earlier this year from the Office of Inspector General (OIG) said the USPS was overcharged by $75 billion for CSRS payments during the same time period. Though the amounts differ, both studies confirm that an overpayment has been made, says USPS spokesperson Joanne Veto.
“We hope Congress takes this report into consideration as it continues to debate our request to restructure prepayment for retiree health benefits as part of a series of actions the Postal Service has taken to address it’s current financial situation,” Veto says. “These include changing delivery frequency, expanding products and services to places more convenient to customers, and greater pricing flexibility to reflect a changing, dynamic marketplace.”
Gene Del Polito, the president of the Association for Postal Commerce, says Congress now has more than enough information from enough authoritative sources to definitively show that the CSRS has been “wildly overfunded. The ball is in Congress’ court. This is a travesty, and requires immediate attention.”
OPM, which is responsible for calculating the Postal Service’s CSRS pension liability, must now by law reconsider its calculation of the Postal Service’s pension assets in light of this report, and submit the results of its reconsideration to the PRC, USPS, and Congress.
What’s more, the PRC suggests that Congress may wish to alter the schedule established in the Postal Accountability and Enhancement Act (PAEA) for potential transfers from the Postal Service Retirement Fund to its Retiree Health Benefit Fund. Currently, such transfers may not take place before Sept. 30, 2015.
The previous OIG study estimates that if the overcharge were used to prepay the Postal Service’s health benefits fund, it would fully meet all of the USPS’s accrued retiree health care liabilities and eliminate the need for the required annual payments of more than $5 billion.
“We’ve overpaid money that is already there in federal coffers,” Del Polito says. “Congress just needs to make a bookkeeping adjustment.”