CSRS Bill Passes House Committee, Joins Senate Version

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The House Committee on Government Reform unanimously approved a bill yesterday that would lower U.S. Postal Service pension contributions -- and potentially keep rates steady until 2006.

The bill, HR 735, follows a similar Senate bill that passed unanimously out of the Senate Committee on Governmental Affairs on March 5.

"This is very good news for the mailing community," said Bob McLean, executive director of the Mailers Council. "Both markups went very smoothly." He is optimistic that the bills will move to the House and Senate floors in a few weeks, adding that HR 735 has 20 cosponsors so far while the Senate bill, S 380, has 14.

But because the bills differ slightly, he said, "we are headed to a conference committee, which [is] oftentimes time consuming to schedule."

Quick passage is important since the postal service has said that it will file a rate case this year if pension contributions are not lowered. Postal officials would not comment on when they plan to file, but insiders said it likely would come in August and would not include provisions for phased rates.

The move to reduce the contributions came after reviews by the federal Office of Personnel Management and General Accounting Office found that the USPS was paying too much into the Civil Service Retirement System. Pension contributions are fixed by law and cannot be changed without congressional approval.

The postal service estimates it would save $2.9 billion in fiscal year 2003 and $2.8 billion in FY 2004 through lower contributions.

The bills require the USPS to use some of the savings to pay down its $11 billion debt in FY 2003, 2004 and 2005. Other savings would be used to continue funding of retiree health benefits and to hold postal rates steady until 2006.

Beyond 2005, the postal service and OPM would be required to calculate the difference in the cost to fund the CSRS pension under the bill and the cost under the old law. This amount would be held in escrow until Congress decided what to do with the money.

One difference between the two is that the Senate bill requires the USPS to report to Congress on how it intends to use any savings before filing future rate increases.

The USPS said in a statement that it is pleased the legislation was approved by both committees.

"Full congressional consideration and passage of this bill is important to any business that uses the mail," the agency said. "It will keep the postal service from overpaying into the [CSRS] thereby allowing postage rates to remain unchanged until 2006."


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