BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
WASHINGTON—The Government Accountability Office said in a report Thursday that the U.S. Postal Service has not made excessive pension payments to the federal government's pension program.
The GAO report found the federal government’s calculations for postal service contributions to two federal retirement plans, the pre-1971 Civil Service Retirement System and the current Federal Employees Retirement System, to be both legal and “actuarially sound.”
The U.S. Postal Service claims it overpaid between $55 billion and $85 billion into the Civil Service Retirement System for pre-1971 benefits because of faulty calculations. It also wanted to access a $6.9 billion surplus in the current Federal Employees Retirement System. The postal service wants to use that money to make other retiree benefit payments and for general spending.
In its response to the GAO report, Jonathan Foley, Office of Personnel and Management policy director, agreed to support a one-time return of the $6.9 billion from the Federal Employees Retirement System over two years.
The report was lauded by congressional critics of the postal service, who are pushing for systemic reforms, including a bill being marked up Thursday by the House Oversight and Government Reform Committee. Allowing the postal service to take pension contributions out of the federal retirement system, which would have to replace the funds, “would be a taxpayer bailout,” said Rep. Dennis Ross, R-Fla., who chairs the House subcommittee with USPS oversight.
The GAO report was ordered by a bipartisan group of lawmakers working on several proposals to save USPS from fiscal crisis.
In written comments to the GAO, Joseph Corbett, the postal service’s CFO and executive vp, criticized the GAO for reaching a conclusion “that ignores actuarial principles that would govern in the private sector.” Postal workers’ unions also expressed disappointment with the GAO’s conclusion, which increase the likelihood of workforce reductions, especially if the pension surplus cannot be freed up.
Hazel Bradford is a reporter for Pensions & Investments, a sister publication of Business Insurance.