Congress seeks final decision on $75bn USPS pension surplus

The different sides of US Congress have come together to ask for a “once and for all” decision on whether the US Postal Service has overpaid up to $75bn into its pension funds. For the first time, the leading figures in postal reform from both political parties in both the US Senate and House of Representatives have signed a single letter, calling on the Government Accountability Office (GAO) to make a decision by the end of October.

The issue relates to payments made by USPS into the Civil Service Retirement System since the Postal Service was formed out of the Post Office Department back in the early 1970s.

The rules on calculating those pension payments were reformed by Congress in 2003, since when regulators at the Postal Regulatory Commission and the USPS Office of the Inspector General, and their respective independent consultants, have calculated that overpayments of between $50bn and $75bn were made into the fund by USPS.

However, the White House agency Office of Personnel Management (OPM) denies that an overpayment has been made into the fund, arguing that the calculation was correct considering the laws in place at the time.

Separately, a further $6.9bn USPS overpayment into the Federal Retirement System (FERS) fund has also been identified, which is not denied by OPM.


USPS, its major customers and employees see a potential return of the overpaid funds as key to stabilising postal finances as the organisation transforms itself for the modern postal era.

However, while both Democrats and Republicans in the US Senate have stated in recent weeks and months that any USPS overpayments should be returned, there is a lack of clarity over exactly how large a rebate should be.

And, in the House of Representatives, leading Republicans deny any overpayments have been made at all – even the FERS overpayments accepted by OPM – repeatedly stating that any repayment would be a “taxpayer bailout”.

A decision from the GAO, the investigative and auditing arm of Congress, could therefore prompt a major breakthrough in attempts to secure bicameral, bipartisan legislation to rescue USPS from its current financial troubles.

The Postal Service is expected to record a $10bn annual loss this fiscal year once all the figures are in from September. Following last year’s $8.5bn loss, it puts the agency right up against its $15bn government borrowing limit.

Letter to GAO

The letter calling on GAO to settle the dispute was issued today by House subcommittee chairman Dennis Ross, who signed the letter along with his Oversight Committee chairman, Darrell Issa.

Also adding their endorsement to the letter were the House Democrat Ranking Members Elijah Cummings and Stephen Lynch.

Senators Tom Carper and Susan Collins, respectively leading Democrat and Republican for postal reform within the Senate also signed the letter, along with Independent Senator and government affairs committee chairman Joe Lieberman.

Senator Scott Brown, a Republican from Massachusetts, also signed the letter.

The letter called on GAO to decide whether the current payment system for pension contributions was correct under US law, whether OPM should provide a refund to USPS, and comment on the impact such a repayment might have on the Civil Service Pension System and the Postal Service’s financial situation.

“We would appreciate a briefing on these issues by the end of September, with a report to follow by the end of October,” the Congressmen said in the letter.

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