Senate Panel Votes Unanimously For CSRS Change
The move toward lowering the contributions came after reviews by the federal Office of Personnel Management and General Accounting Office found that the postal service 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 bill calls for the USPS to use any savings to pay down its $11 billion debt in FY 2003, 2004 and 2005 while continuing to fund retiree health benefits and 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 CSRS 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 change made to the bill is a requirement that the USPS report to Congress on how it intends to use any savings before filing future rate increases.
The bill's swift movement out of committee encouraged mailers.
"Everybody [on the committee] showed up, which shows a remarkable degree of interest in the bill," said Bob McLean, executive director of the Mailers Council. "The markup was very fast and very easy. The vote was made in 10 or 15 minutes."
The bill is similar to one in the House of Representatives set for markup today by the House Government Reform Committee. Though McLean thinks that bill also will move quickly to the full House, the bills still have a long way to go. Since they are slightly different, 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 most likely would come in August and would not include provisions for phased rates.