U.S. Postal Service overpayment money eyed to spur early retirement
By Hazel Bradford | November 2, 2011 2:45 pm
U.S. Postal Service would get back $6.9 billion in pension overpayments and use some of that money to encourage at least 100,000 employees to retire early, according to a proposal announced Wednesday by a bipartisan group of senators.
One-fourth of the overpayment from USPS to the Federal Employees' Retirement System, Washington, could be spent on incentives to get many of an estimated 125,000 employees to retire early, four members of the Senate Homeland Security and Governmental Affairs Committee — Chairman Joseph Lieberman, I-Conn., Susan Collins, R-Maine, Thomas Carper, D-Del., and Scott Brown, R-Mass. — said at a news conference.
Savings from what Mr. Lieberman called the “compassionate buyout program” would save the postal service more than $6 billion each year after paying for the buyouts.
“We want to give the postmaster general and his team the tools to incentivize people to retire early,” Mr. Carper said. “With the right tools and quick action from Congress and the (Obama) administration, the postal service can reform, right-size and modernize.”
“We are not crying wolf here,” Ms. Collins said. “The postal service literally will not survive without comprehensive legislation and will not be able to meet payroll a year from now.”
Mr. Lieberman noted that returning the $6.9 billion, which the White House supports, does not affect taxpayers. “The refund from FERS is not a bailout; it is the result of a legal analysis that everybody agrees with. This is money that they are owed.”
The postal service is required by federal law to prefund 10 years' worth of pension benefits, which created the $6.9 billion surplus in FERS, which is managed by the $264 billion Federal Retirement Thrift Investment Board, Washington.
The senators avoided the more controversial issue of $55 billion or more in pension overpayments that postal officials claim were made into the pre-1971 Civil Service Retirement System.