Congressman Stephen Lynch introduced legislation yesterday to correct methodology which overcharges USPS for its CSRS retirement obligations. The legislation amends the provisions of title 5, United States Code, relating to the methodology for calculating the amount of any Postal surplus or supplemental liability under the Civil Service Retirement System.
This is a bill in the U.S. Congress originating in the House of Representatives . A bill must be passed by both the House and Senate and then be signed by the President before it becomes law.
SPEECH OF HON. STEPHEN F. LYNCH
IN THE HOUSE OF REPRESENTATIVES
THURSDAY, JULY 15, 2010
Mr. LYNCH. Madam Speaker, the United States Postal Service’s CSRS Obligation Modification Act of 2010, is intended to remedy a unfair and inequitable methodology for allocating the Postal Service’s share of Civil Service Retirement System, CSRS, retirement benefit liabilities for employees that provided service to this country under both the Post Office Department and the independent United States Postal Service.
According to a January 2010 report by the United States Postal Service’s Office of Inspector General, USPS-OIG, the Postal Service paid more into the Civil Service Retirement and Disability Trust Fund that it would have paid if a more equitable methodology were used to allocate CSRS retirement benefit liabilities between the Federal government and the United States Postal Service.
As a result of the USPS-OIG report’s findings, the Postmaster General of the United States Postal Service submitted a request, in accordance with section 802(c) of the Postal Accountability and Enhancement Act, to the Postal Regulatory Commission, PRC, calling for an independent and objective review of the methods used to allocate benefit liabilities between the Postal Service and the Federal government under generally accepted actuarial practices and principles.
The independent actuarial firm hired by the PRC, The Segal Company, determined that the current methodology used by the Office of Personnel Management, OPM, for allocating such retirement benefits between the United States Postal Service and the Federal government follows an antiquated methodology that fails to incorporate current actuarial best practices and accounting standards as recognized and codified by the Financial Accounting Standard Board.
Accordingly, to remedy this unjust treatment, this legislation I am introducing today directs OPM to update and modernize the actuarial methodology to be used in allocating CSRS retirement benefit liabilities between the United States Postal Service and the Federal government in accordance with The Segal Company’s recommendation. Under this approach, the Federal government’s portion of an individual’s CSRS annuity will be based on the CSRS benefit accrual formula and the conventional individual’s “high-3” average salary. By utilizing this methodology, this legislation will ensure that OPM is using modern actuarial practices and accounting standards to apportion the benefit liabilities that are codified by the independent Financial Accounting Standard Board under FASB ASC 715.