Postal union leader: Stop the misallocation of Civil Service Retirement System pension costs
COMMENTARY | "The failure to uphold the promise to fix the unfair pension allocation is hurting the Postal Service’s ability to recover from the pandemic," writes the president of the National Association of Letter Carriers.
More than 165 million U.S. businesses and households entrust the U.S. Postal Service to seamlessly deliver mail and packages – be it amidst a pandemic or a severe winter storm. The men and women of USPS tirelessly provide a vital, modern service six and seven days a week, while serving as the eyes and ears of every community in America.
The Postal Service is the indispensable foundation of the nation’s mailing industry – an industry supporting over 7.9 million jobs and a $1.9 trillion industry. Postal employees, characterized by their hardworking, diligent, and reliable nature, form a steadfast workforce. Their consistent service positively impacts every American’s daily life, particularly in this age of booming e-commerce. Americans depend on USPS and its robust processing and delivery networks to deliver tens of millions of packages every day of the year, as well as bills, Social Security checks, ballots, and heartfelt letters.
With this long and proven record of service to the American people, it’s hard to understand why the U.S. Treasury has persistently and unfairly tapped the retirement funds of this essential workforce for over half a century.
That’s right, for some 52 years, a glaring misallocation of pension liabilities has persisted, resulting in about $90 billion in unjust expenses to USPS, harming postal employees and postage ratepayers.
This accounting problem came to light in 2010 during the Obama administration when the Postal Regulatory Commission released the results of an independent audit, often referred to as the “Segal Study.” The audit examined the Postal Service’s assets and liabilities within the Civil Service Retirement System and found that the methodology used by the Office of Personnel Management in their valuation of postal CSRS pensions did not meet the standard of “fair, equitable, or preferred [private sector] methodology.” It recommended immediate reforms.
Now, over a decade later, corrective action has yet to be taken, with three successive presidential administrations sidestepping the issue. While the Postal Service Reform Act of 2022 passed by Congress was a positive step forward, it was intentionally silent on the postal pension policies since Congress previously determined that executive administrative action could be taken to resolve the issue. President Biden, acclaimed as the “most pro-labor president in history,” now has an opportunity to once again demonstrate his pro-worker commitment by directing OPM to cease the unjust raid on the USPS pension fund by implementing the Segal Study’s long-overdue reforms.
It is time for President Biden to deliver for the letter carriers and other postal workers who voted for him. In fact, in 2020, then-former Vice President Joe Biden acknowledged this issue and expressed support for rectifying the misallocation of CSRS pension costs in a candidate questionnaire for the National Association of Letter Carriers stating, “I have long fought to change the federal employees’ pension funding formula to prevent the Postal Service from overpaying into the federal government’s pension fund.”
As we approach another election year, we eagerly anticipate the fulfillment of this commitment and expect the voices of postal employees to be heard.
The failure to uphold the promise to fix the unfair pension allocation is hurting the Postal Service’s ability to recover from the pandemic — adding an astounding $3 billion to its expenses in 2023 and accounting for nearly half of last year’s net loss. Continued failure to address this problem will not only adversely affect the USPS but also impact the millions of Americans who depend on its services.
Fortunately, there is a viable solution to stop the raid on the USPS pension fund, saving the USPS billions of dollars. Congress has repeatedly granted the Administration clear legal authority and guidance to fix the unfair pension allocation. President Biden possesses the power to take immediate and unilateral action without any additional action by Congress. If adopted, the Segal reforms will pave the way for the USPS to save substantial funds while fairly and justly allocating pension costs between postal and other federal workers.
The U.S. Postal Service is an essential workforce of public servants in which we can entrust the safe passage of our mail; and it is an essential institution that binds the nation together. We urgently call on President Biden to champion America’s hardworking and dedicated postal employees, rectify a half-century-old mistake, and put an end to the raid on the USPS pension fund.
Brian Renfroe is a second-generation letter carrier and president of the National Association of Letter Carriers, the union representing 285,000 active and retired city letter carriers employed by the United States Postal Service.