The United States Postal Service plans to resume paying into the $376.7 billion Federal Employees Retirement System, Washington, this current quarter, thanks to pending legislation that would let it use a $6.9 billion overpayment to FERS for other purposes.
In a statement Thursday, the postal service said “it is in a financial position to resume payment,” but no specific date was announced. It also noted that the contribution is “subject to further legislative developments.”
House and Senate committees with USPS jurisdiction have passed legislation to reform the postal service, but only the House version specifically lets it use the $6.9 billion overpayment for other purposes, including an early-retirement buyout program to trim USPS payroll.
The bills have not been scheduled for final votes. USPS officials were not available to comment on what would happen if the legislation does not pass.
The postal service stopped making FERS payments on June 24 to meet payroll and other expenses, which freed up $900 million in fiscal year 2011, which ended Sept. 30. By the start of fiscal 2011, USPS had overfunded FERS by $10.9 billion. The overpayment is the result of a federal law that requires the postal service to prefund 10 years' worth of pension benefits.
The suspension of payments did not affect the continued accrual of service credit by employees participating in FERS, and employee contributions into FERS continued.
