New Legislation: USPS to Cut Pension Payments

The Senate passed legislation yesterday to allow the U.S. Postal Service to scale back some of its pension payments, a move that would keep postal rates flat until fiscal 2006. The House is scheduled to consider an identical bill today. Under both bills, the Postal Service would keep billions of dollars it would have paid into the Civil Service Retirement System fund, which covers employees who joined the agency by 1983. Projected savings include $2.9 billion this fiscal year and $2.6 billion in fiscal 2004, according to USPS estimates. The Postal Service would be required to use the money to pay down its $11.2 billion debt and stave off rate increases over the next three years. It could not use the money to pay bonuses to its executives. The pension contributions can be reduced without hurting current and future retirees, supporters say, because an Office of Personnel Management analysis last year showed that the Postal Service was on course to overfund its pension obligations by $71 billion.