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APWU Urges Commission
To Make Repeal of Pre-Funding Mandate a Priority

APWU Web News Article 015-2011, Feb. 2, 2011

Repealing a provision of the Postal Accountability and Enhancement Act is “so critical to the welfare of the Postal Service” that it should be the exclusive focus of a report to the president and Congress on the effectiveness of the law, the APWU wrote to the Postal Regulatory Commission on Feb. 1. The provision, which requires the Postal Service to pre-fund health benefits, costs the Postal Service more than $5 billion annually and has driven the USPS to the brink of insolvency.

These payments are “unsustainable, inconsistent with the provision of universal service at fair and reasonable rates, and inconsistent with the operation of the Postal Service in an efficient and businesslike manner,” the union’s counsel wrote [PDF] on behalf of the APWU.

There is a “broad consensus among postal industry stakeholders that the most urgent need” for reform of the PAEA is the pre-funding mandate. No other private company or government agency is forced to bear such a burden.

Of almost equal importance — because of the practical link to the pre-funding issue — is the need to provide the USPS access to the substantial amounts it has overpaid into its pension funds, the union said. The APWU urged the commission to ask Congress to grant the Postal Service access to overpayments to the Civil Service Retirement System and the Federal Employees Retirement System. Three independent actuarial studies have confirmed the USPS has a surplus of between $50 billion and $75 billion in its CSRS pension. FERS overpayments are estimated at $6 billion to $7 billion.

The Postal Accountability and Enhancement Act (PAEA) requires the commission to deliver a report to the president and Congress evaluating the law and to suggest legislative measures to improve its effectiveness. The union’s recommendations follow a public forum held by the PRC on Jan. 11 to provide postal industry stakeholders, including the APWU, the opportunity to comment informally.

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