Treasury Clashes With USPS on Military Pensions

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The Treasury Department recommended in a report issued Sept. 30 that the U.S. Postal Service pay the estimated $27 billion its employees who are military veterans are scheduled to receive for military service when they retire.

The recommendation conflicts with that of the USPS, which argues that it should be relieved of responsibility for employee military service benefits and that it is the only federal agency tasked with bearing this cost. Postal officials have said that if Congress relieves the USPS of this responsibility, it would have an extra $10 billion to address the growing costs of retiree health benefits.

However, in its report the Treasury Department argued that the USPS should fund all its expenses through postal rates. Though other agencies don't have to pay for military service benefits, the cost ultimately is borne by the taxpayer whether the expense is charged to the Treasury Department or to the individual agencies, the department said.

Postal employees receive credit for the military service toward their pensions under the Civil Service Retirement System, so it would be fair to make the USPS pay the military benefits of all employees hired after June 30, 1971, when the postal service became independent, the Treasury Department recommended.

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