Postal Pension Funding Reform: Review of Military Service Funding Proposals
GAO-04-281
Published: Nov 26, 2003. Publicly Released: Nov 26, 2003.
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Highlights
The Postal Civil Service Retirement System Funding Reform Act of 2003 (the Act) required the United States Postal Service, Department of the Treasury, and Office of Personnel Management (OPM) to prepare proposals detailing whether and to what extent the Treasury and Postal Service should fund the benefits attributable to the military service of the Postal Service's current and former Civil Service Retirement System (CSRS) employees. The Act required GAO to evaluate the proposals. Our objective in doing so was to assess the agencies' positions and provide additional information where it may be useful.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| To help promote full and consistent funding of CSRS benefits among selfsupporting federal agencies, we suggest that the Congress consider requiring all self-supporting federal entities to pay the dynamic cost of employee pension benefit costs not paid for by employee contributions and deposits, excluding military service costs. | In October 2004, staff from the Government Efficiency and Financial Management Subcommittee of the Committee on Government Reform (to whom we issued our report in 2003) informed GAO that the committee leadership had considered, but could not support, requiring self-supporting federal entities to fund the employer's portion of the dynamic cost of civil service pensions (exclusive of military service) from full costing and the fees collected from the public or other agencies. Nonetheless, in December 2006, Congress passed Public Law 109-435, the Postal Accountability and Enhancement Act, which required the Postal Service (a self-supporting federal entity) to pay their full dynamic civil service pension costs, exclusive of military service. Consequently, we consider this matter for congressional consideration closed. | |
| To help promote full and consistent funding of CSRS benefits among selfsupporting federal agencies, we suggest that the Congress consider treating all self-supporting federal entities consistently with regard to whatever decision is made on Postal Service funding of the military service component of CSRS employee benefits. | In October 2004, staff from the Government Efficiency and Financial Management Subcommittee of the Committee on Government Reform (to whom we issued our report in 2003)informed GAO that the committee leadership considered, but determined it could not support, requiring all self-supporting federal entities to treat funding the military service component of the employer's portion of the dynamic cost of civil service pensions the same as the Postal Service. Consequently, we consider this matter for congressional consideration closed. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Personnel Management | If the Congress decides that the Postal Service should be responsible for military service costs associated with its employees, we recommend that the Office of Personnel Management provide the Congress with estimates of the additional cost to the Treasury of making the Postal Service responsible only for employee military service that became creditable after June 30, 1971. |
OPM submitted to Congress estimates of the additional cost to the Treasury of making the Postal Service responsible only for employee military service that became creditable after June 30, 1971. Subsequent to OPM's submission, bills were introduced in both the House (H.R. 4341) and Senate (S. 2468) that would, if enacted, transfer responsibility for funding all Civil Service Retirement System (CSRS) benefits attributable to military service for all current and former Postal Service CSRS employees back to the Treasury.
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Topics
Civil service pensionsCivil service retirement systemFederal employees retirement systemFunds managementRetireesInteragency relationsPensionsPostal service employeesRetired military personnelPostal service