Postal Windfall

The U.S. Postal Service has been scrambling to address the strict funding requirements of its pension and retiree health care funds, but several legislative steps could bring the agency $142.4 billion in cash to be used, in part, for employee benefits.

According to a recent report from the USPS inspector general, the Postal Service could reduce its debt; boost cash flow; and meet obligations to its Civil Service Retirement System, Federal Employees Retirement System and retiree health funds if it adjusts its funding requirements and recovers billions in overpayments to those accounts. Earlier this year the IG identified $75 billion in overpayments to CSRS and $6.8 billion in excess payments to FERS.

The Postal Service also is required to pre-fund retiree health benefits at more than $5 billion annually, and for fiscal 2010 was not granted relief from that provision. According to Postmaster General John Potter, USPS paid its obligation using extra funds and borrowing authority, but the agency could run out of cash in 2011 as a result.

Several proposals could bring the Postal Service's obligations to employee benefits back in line, however, and give the agency some additional flexibility with its cash flow. For example, while USPS pre-funds all its pension and retiree health care accounts, industry standards are 80 percent and 30 percent, respectively. The rest of the federal government pre-funds pensions at 41 percent and does not have retiree health care liabilities. Lowering pre-funding requirements could bring the Postal Service $55.1 billion to be used for retiree health premiums and other operations, the report found.

USPS also could recover $5.5 billion from FERS and $75 billion from CSRS in overfunding. The IG has recommended the Postal Service pursue legislative action to adjust its funding requirements until the FERS surplus is reduced, and that the Office of Personnel Management establish a subaccount for USPS' retiree benefits contributions to increase transparency. These changes would increase cash flow, help the agency cover its expenses and bring its pension funds in line with the private sector. In addition, OPM misinterpreted a 1974 law governing pension funding and could recalculate the Postal Service's obligations to CSRS, the inspector general found.

Stop-Loss: Go

Military personnel and veterans whose service in Iraq or Afghanistan was extended under stop-loss provisions now have a few extra weeks to apply for the bonus compensation earned.

The Defense Department recently announced that service members have until Dec. 3 to submit claims for retroactive stop-loss special pay, a benefit of $500 for each full or partial month served under stop-loss between Sept. 11, 2001, and Sept. 30, 2009. The program was designed to compensate military members who involuntarily served extended time. The original deadline for claims was Oct. 21, but the continuing resolution signed last week to fund agencies through Dec. 3 provides service members additional time to apply.

More than 145,000 people qualify for the special pay, but fewer than half of those eligible have submitted claims, according to Defense. The average payment is nearly $3,800. Service members and veterans can apply for the benefit at www.defense.gov/stoploss/.