US Postal Service 2013 Annual Report Download - page 55

2013 Report on Form 10-K United States Postal Service 53
Administration Proposals
PRESIDENT'S FISCAL YEAR 2014 BUDGET PROPOSAL
On April 10, 2013, the President released his Fiscal Year 2014 Budget Proposal, which included several
recommendations related to the Postal Service. The President's proposal is one component of the budgeting process;
Congress separately devises its own budget proposals for consideration. The President’s proposal includes a
comprehensive postal reform package that would:
 Require the Office of Personnel Management (OPM) to calculate FERS costs using economic assumptions and
demographic factors specific to the Postal Service workforce and to return the FERS surplus.
 Restructure Retiree Health Benefits payments on an accruing cost basis rather than on a fixed cost basis.
 Reduce mail delivery from six days to five days per week starting in June 2013.
 Increase collaboration with state and local governments.
 Permit the Postal Service Governors to enact a modest one-time increase in postage for Market-Dominant
services (primarily First-Class Mail and Standard Mail).
The President’s budget proposal also includes $70.8 million for free mail for the blind and overseas voters. The proposal
contained no provisions related to the Revenue Forgone Reform Act of 1993, which authorizes the Postal Service to
receive $29 million annually through 2035 as reimbursement for services it provided from FY 1991 through FY 1998.
CONGRESSIONAL POSTAL REFORM PROPOSALS
A number of bills that could affect the Postal Service were introduced in the First Session of the 113th Congress. A
detailed description of two major reform bills and their current status follows.
Postal Reform Act of 2013, S. 1486
On August 2, 2013, S. 1486, the Postal Reform Act of 2013, was introduced in the Senate. The bill proposes to reform
the Postal Service by addressing a number of issues, including: assessments of the Federal Employees’ Retirement
System (FERS) and the Civil Service Retirement System (CSRS) pension fund liabilities, calculation of any pension fund
liabilities using postal-specific economic and demographic assumptions, any FERS pension fund surplus are to be
returned to the Postal Service but can only be used for certain purposes, authority to negotiate retirement benefits for new
employees, restructuring of payments for Retiree Health Benefits (RHB), and implementation of a Postal Service health
benefits plan -- negotiated with the unions -- that could incorporate coordinated Medicare benefits for postal employees
and future retirees. The bill also requires arbitrators to consider the financial condition of the Postal Service when
rendering decisions.
S. 1486 addresses Postal Service operations in several ways, including: requiring the Postal Service to maintain for two
years the existing service standards for First-Class Mail and Periodicals, requiring a two-year moratorium on the closure
or consolidation of mail processing facilities, permitting the establishment of a five-day mail delivery schedule after one
year, allowing for delivery point modernization, authorizing the Postal Service Governors to establish a system of classes
and rates for Market-Dominant products, as well as workshare discounts and Negotiated Service Agreements (NSAs),
giving the Postal Service the authority to introduce new non-postal and governmental services, and permitting the Postal
Service to ship beer, wine, and distilled spirits.
S. 1486 would make changes to the current governance structure, including: modifying the make-up of the Board of
Governors, establishing an Advisory Committee to develop and oversee implementation of strategies to ensure the Postal
Service’s long-term financial solvency, appointment of a Chief Innovation Officer, and creating a plan to reduce the total
number of area and district offices. The bill also reforms programs applicable to the entire Federal Government, including
the Federal Employees’ Compensation Act (FECA), and includes provisions related to federal property management,
including co-location with other federal agencies and the disposal of real property. S. 1486 was referred to the Senate
Homeland Security and Governmental Affairs Committee.
Postal Reform Act of 2013, H.R. 2748
On July 19, 2013, H.R. 2748, the Postal Reform Act of 2013, was introduced in the House. H.R. 2748 would allow the
Postal Service to establish a five-day mail delivery schedule while temporarily mandating six-day package delivery for
domestic competitive products. It would allow the Postal Service to forgo past-due payments to prefund retiree health
benefits and would eliminate the FY 2013 and FY 2014 payments. Starting in 2015, required payments to prefund retiree
health benefits would be based on an actuarial calculation designed to achieve full funding in 2056, while current retiree
health benefits premiums would be paid out of the Postal Service Retiree Health Benefits Fund (PSRHBF). H.R. 2748