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Explaining the POST Act, Section-by-Section

Explaining the POST Act, Section-by-Section

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Published by SenatorCarper
This is a section-by-section explanation of my comprehensive postal reform bill, the POST Act.
This is a section-by-section explanation of my comprehensive postal reform bill, the POST Act.

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Published by: SenatorCarper on Sep 06, 2011
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09/06/2011

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Section-by-Section Explanation of the POST Act
 Section 101 – Transfer of Amounts from the Civil Service Retirement and  Disability Fund 
The Postal Service believes that it has paid more than it owes into the CivilService Retirement System (CSRS). This is due, the Postal Service has argued,to a decision that was made in 1974 about how to divide responsibility betweenthe Postal Service and the federal government for CSRS costs related to postalemployees who transitioned over from the former Post Office Department.The division gave the Postal Service responsibility for all post-1970 costsrelated to these employees’ pensions, including costs related to pay increasesthe employees would have received had the Postal Service not been createdand they had remained in federal service. Two reports released in recentmonths by the Postal Service’s Office of Inspector General and the PostalRegulatory Commission argue that this methodology is unfair, outdated andnot consistent with the requirement enacted as part of the Postal Accountability and Enhancement Act (P.L. 109-435) to calculate a Postalsurplus or liability for CSRS. The PRC found that the methodology being used by OPM produces an inequitable allocation of responsibilities.This section would amend section 8438(h) of title 5, United States Code. New subparagraph (B) requires the Office of Personnel Management (OPM) toredetermine the Postal Service’s CSRS obligations each year assuming that anew methodology laying out the division of responsibility between the PostalService and the federal government had been in place since 1971, when thePostal Service was created. The results of the redetermination are to bereported to the Postal Service by June 30
th
of each year. Through fiscal year2016, any surplus owed to the Postal Service may be transferred to the PostalService Retiree Health Benefits Fund. Beginning in fiscal year 2017, surplusfunds may be transferred to the Retiree Health Benefits Fund. If the PostalService has satisfied all of its obligations to that Fund, surplus funds may beused to fund the Employees’ Compensation Fund or to pay down the PostalService’s debt to the Treasury.
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 Any disbursement of surplus CSRS funds owed to the Postal Service undernew subparagraph (B) would be made at the direction of the Postal Service’sBoard of Governors. Disbursements made through fiscal year 2016 would becapped each year at the amount the Postal Service’s must pay into the RetireeHealth Benefits Fund under section 8909a(d)(3)(A) of title 5, United StatesCode. Any disbursement would be credited to the Postal Service towards theamounts it owes under the law.This section also lays out the methodology by which OPM must redeterminethe Postal Service’s CSRS obligations. The new methodology would result inthe federal government being made responsible to a greater degree for CSRScosts associated with a pay increases received by former Post OfficeDepartment employees who transitioned to the Postal Service. Theredetermination would apply to all CSRS payments the Postal Service hasmade since July 1, 1971 and all it is projected to make. The Postal Service would be permitted to appeal any determinations made by OPM to the CSRSBoard of Actuaries.
 Section 102 – Transfer of Amounts from the Federal Employees Retirement  System
The Postal Service also believes that it has paid more than it owes into theFederal Employees Retirement System (FERS). This section requires OPM todetermine at the end of each fiscal year whether the Postal Service has a FERSsurplus or liability. Through fiscal year 2016, any surplus owed to the PostalService may be transferred to the Postal Service Retiree Health Benefits Fund.Beginning in fiscal year 2017, surplus funds may be transferred to the RetireeHealth Benefits Fund. If the Postal Service has satisfied all of its obligations tothat Fund, surplus funds may be used to fund the Employees’ CompensationFund or to pay down the Postal Service’s debt to the Treasury. Any disbursement of surplus FERS funds owed to the Postal Service would betransferred at the direction of the Postal Service’s Board of Governors.Disbursements made through fiscal year 2016 would be capped each year atthe amount the Postal Service’s must pay into the Retiree Health BenefitsFund under section 8909a(d)(3)(A) of title 5, United States Code. Any disbursement would be credited to the Postal Service towards the amounts itowes under the law.
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Beginning in fiscal year 2017, if OPM determines that the Postal Service has aFERS liability. OPM would develop an amortization schedule that would allow the Postal Service to pay down the liability with annual payments made over aperiod of 30 years. The Postal Service would be permitted to appeal any determinations made by OPM to the CSRS Board of Actuaries.
 Section 103 – Calculating the Postal Service Retiree Health Benefits Fund  Liability on Long-Term Funding Basis
This section lays out the actuarial assumptions OPM would use in calculatingthe Postal Service’s retiree health benefit obligations. These assumptions would be used to develop an amortization schedule of any liability it owes forthose obligations starting in fiscal year 2017, as required under current law.
 Section 104 – Requiring OPM to Report the Funding Status Under Board of  Actuaries
This section would require OPM to provide data to the Postal Service on any Postal Service retiree health obligations it identifies.
 Section 201 – Postal Policy
This section deletes language in section 101(b) of title 39 that requires thePostal Service to provide “a maximum degree of” postal services in certaincommunities. It also removes a requirement in the same section that preventsthe Postal Service from closing a post office solely for operating at a deficit.The Postal Service believes that these changes are necessary so it can be freedto close post offices that are no longer needed or are not sustainable.
 Section 202 – Specific Powers of the United States Postal Service
This section would amend section 404(d)(2) of title 39, which deals with thesteps the Postal Service must take before closing a post office. The amendment would require that the Postal Service give primary consideration to whether aproposed closing is consistent with eth Postal Service’s universal serviceobligations under section 101(b) of title 39.
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