Postal Service executives get extra perks

More than 800 U.S. Postal Service executives receive health insurance coverage at no cost, in just one example of the excess and mismanagement that's costing the agency $800 million annually, according to a Republican lawmaker.

A USPS inspector general report released last week in response to requests from Sen. Susan Collins, R-Maine, found the Postal Service pays the full health insurance premiums for 835 Postal Career Executive Service employees, OIG directors and Senior Executive Service members, a perk not available to other federal workers. Fifteen members of the Postal Regulatory Commission receive this benefit, according to PRC spokesman Norman Scherstrom.

"It is unbelievable to me that the Postal Service -- awash in red ink and asking for huge postal rate hikes, service reductions and relief from its financial obligations -- is paying the full health care premiums for its top executives," said Collins, the ranking member of the Homeland Security and Governmental Affairs Committee, which oversees USPS.

Agency officials have said the higher contribution rate helps attract and retain talent, according to the audit. The report also found the Postal Service contributes 79 percent of Federal Employees Health Benefits Program premiums for most employees compared to the government's 72 percent contribution for other federal workers. And USPS covers the entire basic Federal Employees' Group Life Insurance rate, while the government contributes only 33.33 percent. USPS could save $139 million in fiscal 2011, if it matched the lower FEGLI contribution rate and $567 in the same calendar year, if it decreased its FEHBP payments, the IG found.

Contribution rates are set during the collective bargaining process with the agency's four major unions. The Postal Service has negotiated a 1 percent annual decrease in FEHBP premium contributions through 2012, and officials have said they plan to discuss health benefit obligations during talks currently under way with the American Postal Workers Union and the National Rural Letter Carriers Association.

Collins also expressed concern about a second audit finding that the Postal Service has awarded contracts to former employees without competition and in several cases paid double their previous salaries to advise incoming executives.

In addition to cutting the number of delivery days and adding more flexibility to increase its part-time workforce, the Postal Service is seeking relief from obligations to its Civil Service Retirement System accounts. USPS Inspector General David Williams earlier this year found the agency had overpaid CSRS by $75 billion, the result of a misinterpretation of a 1974 law regulating pension funding. The Office of Personnel Management incorrectly made USPS fund a higher portion of the pensions than it owed, and postal officials are seeking congressional action to revise those calculations.

In a letter last week to PRC Chairwoman Ruth Goldway, OPM Director John Berry wrote the agency supports a re-examination of the complex policies mandating the Postal Service's pension obligations, but added OPM does not have the authority to change its methodology without Congress' approval. Lawmakers have introduced legislation in the House and Senate to reduce the Postal Service's CSRS burden, but both bills remain under committee consideration.

Gerald McKiernan, a USPS spokesman, said he thinks Sen. Tom Carper, D-Del., is very serious about moving recently introduced legislation forward and is hopeful Congress will consider it if lawmakers convene for a lame duck session. McKiernan could not comment on the IG report before this story was published.

CORRECTION: The initial version of this article mischaracterized OPM's position on the recalculation of USPS' pension obligations.