GAO Begins Review of Postal Possible Retirement Funding Change
The General Accounting Office is examining the U.S. Postal Service's funding of a retirement plan to see whether the USPS has contributed more than previously expected to the Civil Service Retirement System.The request comes as the postal service works to get a change in the law that would allow it to lower contributions to the CSRS after a review last month revealed that it has almost fully funded future obligations for postal employees and retirees in the system.
If that review is correct, the postal service could lower its retirement contributions by $2.9 billion in fiscal year 2003 and $2.6 billion in FY 2004. Postmaster general John E. Potter said that the savings could be used to pay down the postal service's debt and keep rates steady until 2006.
A bill, called the Postal Civil Service Retirement System Funding Reform Act of 2002, was introduced this month to let the postal service change its contribution amount. Though it had strong support in Congress, some members wanted a GAO report on the matter before deciding.
Bernard L. Ungar, a GAO director, said his office is preparing "a reliability check" on the status of the pension funding and will report to Congress "probably fairly quickly, so my guess is early next year, but we do not have a definitive timeframe at this juncture."
Congress adjourned for the year, and the next session begins in January.
Time is an issue since the USPS has said it will begin preparing for a rate filing in January and file a rate case with the Postal Rate Commission if the law is not changed by April. If the postal service cannot reduce its retirement contributions, Potter has said the next rate increase would come at some point in 2004.
