In an effort to make the U.S. Postal Service stronger financially, Sen. Tom Carper, D.-Del., has introduced a bill that would reduce its pension pre-funding obligation and change its health benefits plans.
It also would allow the USPS to ship beer, wine and distilled spirits, opening a potentially significant new line of business.
Carper debuted the Improving Postal Operations, Service, and Transparency Act of 2015, or iPOST on Sept. 17, offering a host of reforms in an effort to make the USPS more sustainable.
"For years, the Postal Service has worked hard to compete in the digital age – keeping prices as low as possible, reducing costs, and innovating where it can," Carper said, in a statement.
"Despite these efforts, the Postal Service's longstanding financial and legislative burdens coupled with the ongoing decline in the volume of First Class mail make this American institution's current business model unsustainable and its future uncertain."
To fix what ails the postal service, iPOST proposes wrangling the cost of its health and retirement benefits with the following reforms:
- Ending its statutory payment schedule and outstanding payments
- Lowering its pre-funding obligation to 80 percent of projected benefit costs
- Amortizing payments over 40 years
- Shifting 10 percent of amortization payments into a retirement-investment plan similar to the Thrift Savings Plan. Any investment income left after the 10 years would be applied to health benefit costs and debt.
- Creating a new health benefits plan to be administered by the Office of Personnel Management, called the Postal Service Health Benefits Program.
- Requiring all postal workers and annuitants to enroll in the plan, and Medicare-eligible beneficiaries to enroll in Medicare, including Parts A, B and D.
iPOST also proposes making the 2014 postage rate permanent, pending the establishment of a new rate system by 2018.
The bill drew wary responses from government employee unions, including officials from the National Active and Retired Federal Employees Association and National Association of Letter Carriers, who felt the benefits plan would increase healthcare costs for postal workers.
"Postal retirees earned their health benefits throughout long careers of service," said NARFE president Richard Thissen, in a statement. "They should not be required to pay for additional health insurance coverage as a condition of continuing to receive those benefits."
NALC president Fredric Rolando also expressed concern, but said, in a statement, that the bill was a good starting point for reform.
"While Sen. Carper's new bill contains several provisions we cannot support and raises a number of serious concerns for letter carriers and the larger federal employee community, we believe it is a good place to begin the conversation about how to preserve and strengthen the Postal Service for the American people, while protecting the legitimate interests of all the key stakeholders."
The USPS is currently required by Congress to pre-fund a portion of its retiree benefits, helping add a substantial amount of red ink toits bottom line. The postal service reported a third quarter loss in August of $586 million, $1.4 billion for the year, in part because of benefit and pre-funding costs.
