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USPS Announces CSRS Surplus
Burrus Update #19-02, November 6, 2002
The Postal Service has announced that a new financial analysis reveals that it has over-funded the Civil Service Retirement System (CSRS) for postal employees. This discovery will have no impact on employee contributions to the retirement fund, future benefits, or annuities to current retirees, but it may reduce future USPS payments to the CSRS system.
The USPS payment to the CSRS retirement system is established by law, and the surplus is the result of interest generated from past payments. The Office of Personnel Management (OPM) performed the analysis of the fund and the Office of Management and Budget (OMB) agrees with the findings. The General Accounting Office (GAO) is reviewing the data.
To change the formula that sets USPS contributions to the retirement fund, Congress would have to adopt legislation authorizing an adjustment. Legislation will be introduced soon to reduce USPS payments and is expected to include specific requirements for the use of the funds that are made available by the reduction in payments. The APWU will wait to see the specific wording of the proposed legislation, but we expect to support it.
If such legislation is approved by Congress and signed into law by the president, the Postal Service would realize approximately $3 billion savings in Fiscal Year 2003 and nearly $2.5 billion in Fiscal Year 2004. The $800 million surplus that was anticipated in FY 2003 would increase to $3.8 billion, and would enable management to extend the current postage rate structure to 2006.
A delay in postage rate increases to 2006 would impede our effort to reduce the subsidies big mailers now enjoy under the management's discounted postage work-share programs: USPS subsidies to private companies would continue.
It is expected that the cry for "postal reform" will be muted by this unexpected infusion of revenue, although postal management is expected to continue to press for full implementation of its Transformation Plan. As part of the plan, plant consolidations are expected to begin in early 2003. Although the union has not been provided with specific information about USPS consolidation plans, it is expected that 25 or more plants (out of 270) will be consolidated in whole or by tour, resulting in the reassignment of several thousand APWU-represented employees. We expect to receive a presentation on the plan in December, at which time the union will be able to provide information regarding the impact in specific offices.
The impact of consolidations on employees would be lessened considerably if agreement is reached to provide special retirement opportunities to employees as part of a contract extension. Discussions on a contract extension continue, and as soon as it is determined whether agreement can or cannot be reached, information will be made available to the membership.
