[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 380 Engrossed in Senate (ES)]
108th CONGRESS
1st Session
S. 380
_______________________________________________________________________
AN ACT
To amend chapter 83 of title 5, United States Code, to reform the
funding of benefits under the Civil Service Retirement System for
employees of the United States Postal Service, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Postal Civil Service Retirement
System Funding Reform Act of 2003''.
SEC. 2. CIVIL SERVICE RETIREMENT SYSTEM.
(a) Definitions.--Section 8331 of title 5, United States Code, is
amended--
(1) in paragraph (17)--
(A) by striking ```normal cost''' and inserting
```normal-cost percentage'''; and
(B) by inserting ``and standards (using dynamic
assumptions)'' after ``practice'';
(2) by amending paragraph (18) to read as follows:
``(18) `Fund balance' means the current net assets of the
Fund available for payment of benefits, as determined by the
Office in accordance with appropriate accounting standards, but
does not include any amount attributable to--
``(A) the Federal Employees' Retirement System; or
``(B) contributions made under the Federal
Employees' Retirement Contribution Temporary Adjustment
Act of 1983 by or on behalf of any individual who
became subject to the Federal Employees' Retirement
System;''; and
(3) by striking ``and'' at the end of paragraph (27), by
striking the period at the end of paragraph (28) and inserting
``; and'', and by adding at the end the following:
``(29) `dynamic assumptions' means economic assumptions
that are used in determining actuarial costs and liabilities of
a retirement system and in anticipating the effects of long-
term future--
``(A) investment yields;
``(B) increases in rates of basic pay; and
``(C) rates of price inflation.''.
(b) Deductions and Contributions.--
(1) In general.--Section 8334(a)(1) of title 5, United
States Code, is amended--
(A) by striking ``(a)(1)'' and inserting
``(a)(1)(A)'';
(B) by designating the matter following the first
sentence as subparagraph (B)(i) and aligning the text
accordingly;
(C) in subparagraph (B)(i) (as so designated by
subparagraph (B)), by striking ``An equal'' and
inserting ``Except as provided in clause (ii), an
equal''; and
(D) by adding at the end the following:
``(ii) In the case of an employee of the United States Postal
Service, the amount to be contributed under this subparagraph shall
(instead of the amount described in clause (i)) be equal to the product
derived by multiplying the employee's basic pay by the percentage equal
to--
``(I) the normal-cost percentage for the applicable
employee category listed in subparagraph (A), minus
``(II) the percentage deduction rate that applies with
respect to such employee under subparagraph (A).''.
(2) Conforming amendments.--Section 8334(k) of title 5,
United States Code, is amended--
(A) in paragraph (1)(A), by striking ``the first
sentence of subsection (a)(1) of this section'' and
inserting ``subsection (a)(1)(A)'';
(B) in paragraph (1)(B)--
(i) by striking ``the second sentence of
subsection (a)(1) of this section'' and
inserting ``subparagraph (B) of subsection
(a)(1)''; and
(ii) by striking ``such sentence'' and
inserting ``such subparagraph''; and
(C) in paragraph (2)(C)(iii), by striking ``the
first sentence of subsection (a)(1)'' and inserting
``subsection (a)(1)(A)''.
(c) Postal Supplemental Liability.--Subsection (h) of section 8348
of title 5, United States Code, is amended to read as follows:
``(h)(1)(A) For purposes of this subsection, `Postal supplemental
liability' means the estimated excess, as determined by the Office,
of--
``(i) the actuarial present value of all future benefits
payable from the Fund under this subchapter attributable to the
service of current or former employees of the United States
Postal Service, over
``(ii) the sum of--
``(I) the actuarial present value of deductions to
be withheld from the future basic pay of employees of
the United States Postal Service currently subject to
this subchapter pursuant to section 8334;
``(II) the actuarial present value of the future
contributions to be made pursuant to section 8334 with
respect to employees of the United States Postal
Service currently subject to this subchapter;
``(III) that portion of the Fund balance, as of the
date the Postal supplemental liability is determined,
attributable to payments to the Fund by the United
States Postal Service and its employees, including
earnings on those payments; and
``(IV) any other appropriate amount, as determined
by the Office in accordance with generally accepted
actuarial practices and principles.
``(B)(i) In computing the actuarial present value of future
benefits, the Office shall include the full value of benefits
attributable to military and volunteer service for United States Postal
Service employees first employed after June 30, 1971, and a prorated
share of the value of benefits attributable to military and volunteer
service for United States Postal Service employees first employed
before July 1, 1971.
``(ii) Military service so included shall not be included in the
computation of any amount under subsection (g)(2).
``(2)(A) Not later than June 30, 2004, the Office shall determine
the Postal supplemental liability as of September 30, 2003. The Office
shall establish an amortization schedule, including a series of equal
annual installments commencing September 30, 2004, which provides for
the liquidation of such liability by September 30, 2043.
``(B) The Office shall redetermine the Postal supplemental
liability as of the close of the fiscal year, for each fiscal year
beginning after September 30, 2003, through the fiscal year ending
September 30, 2038, and shall establish a new amortization schedule,
including a series of equal annual installments commencing on September
30 of the subsequent fiscal year, which provides for the liquidation of
such liability by September 30, 2043.
``(C) The Office shall redetermine the Postal supplemental
liability as of the close of the fiscal year for each fiscal year
beginning after September 30, 2038, and shall establish a new
amortization schedule, including a series of equal annual installments
commencing on September 30 of the subsequent fiscal year, which
provides for the liquidation of such liability over 5 years.
``(D) Amortization schedules established under this paragraph shall
be set in accordance with generally accepted actuarial practices and
principles, with interest computed at the rate used in the most recent
dynamic actuarial valuation of the Civil Service Retirement System.
``(E) The United States Postal Service shall pay the amounts so
determined to the Office, with payments due not later than the date
scheduled by the Office.
``(F) An amortization schedule established under subparagraph (B)
or (C) shall supersede any amortization schedule previously established
under this paragraph.
``(3) Notwithstanding any other provision of law, in computing the
amount of any payment under any other subsection of this section that
is based upon the amount of the unfunded liability, such payment shall
be computed disregarding that portion of the unfunded liability that
the Office determines will be liquidated by payments under this
subsection.
``(4) Notwithstanding any other provision of this subsection, any
determination or redetermination made by the Office under this
subsection shall, upon request of the Postal Service, be subject to
reconsideration and review (including adjustment by the Board of
Actuaries of the Civil Service Retirement System) to the same extent
and in the same manner as provided under section 8423(c).''.
(d) Repeals.--
(1) In general.--The following provisions of law are
repealed:
(A) Subsection (m) of section 8348 of title 5,
United States Code.
(B) Subsection (c) of section 7101 of the Omnibus
Budget Reconciliation Act of 1990 (5 U.S.C. 8348 note).
(2) Rule of construction.--Nothing in this subsection shall
be considered to affect any payments made before the date of
the enactment of this Act under either of the provisions of law
repealed by paragraph (1).
(e) Military Service Proposals.--
(1) Proposals.--The United States Postal Service, the
Department of the Treasury, and the Office of Personnel
Management shall, by September 30, 2003, each prepare and
submit to the President, the Congress, and the General
Accounting Office proposals detailing whether and to what
extent the Department of the Treasury or the Postal Service
should be responsible for the funding of benefits attributable
to the military service of current and former employees of the
Postal Service that, prior to the date of the enactment of this
Act, were provided for under section 8348(g)(2) of title 5,
United States Code.
(2) GAO review and report.--Not later than 60 days after
the Postal Service, the Department of the Treasury, and the
Office of Personnel Management have submitted their proposals
under paragraph (1), the General Accounting Office shall
prepare and submit a written evaluation of each such proposal
to the Committee on Government Reform of the House of
Representatives and the Committee on Governmental Affairs of
the Senate.
SEC. 3. DISPOSITION OF SAVINGS ACCRUING TO THE UNITED STATES POSTAL
SERVICE.
(a) In General.--Savings accruing to the United States Postal
Service as a result of the enactment of this Act--
(1) shall, to the extent that such savings are attributable
to fiscal year 2003 or 2004, be used to reduce the postal debt
(in consultation with the Secretary of the Treasury), and the
Postal Service shall not incur additional debt to offset the
use of the savings to reduce the postal debt in fiscal years
2003 and 2004;
(2) shall, to the extent that such savings are attributable
to fiscal year 2005, be used to continue holding postage rates
unchanged and to reduce the postal debt, to such extent and in
such manner as the Postal Service shall specify (in
consultation with the Secretary of the Treasury); and
(3) to the extent that such savings are attributable to any
fiscal year after fiscal year 2005, shall be considered to be
operating expenses of the Postal Service and, until otherwise
provided for by law, shall be held in escrow and may not be
obligated or expended.
(b) Amounts Saved.--
(1) In general.--The amounts representing any savings
accruing to the Postal Service in any fiscal year as a result
of the enactment of this Act shall be computed by the Office of
Personnel Management for each such fiscal year in accordance
with paragraph (2).
(2) Methodology.--Not later than July 31, 2003, the Office
of Personnel Management shall--
(A) formulate a plan specifically enumerating the
actuarial methods and assumptions by which the Office
shall make its computations under paragraph (1); and
(B) submit such plan to the Committee on Government
Reform of the House of Representatives and the
Committee on Governmental Affairs of the Senate.
(3) Requirements.--The plan shall be formulated in
consultation with the Postal Service and shall include the
opportunity for the Postal Service to request reconsideration
of computations under this subsection, and for the Board of
Actuaries of the Civil Service Retirement System to review and
make adjustments to such computations, to the same extent and
in the same manner as provided under section 8423(c) of title
5, United States Code.
(c) Reporting Requirement.--The Postal Service shall include in
each report rendered under section 2402 of title 39, United States
Code, the amount applied toward reducing the postal debt, and the size
of the postal debt before and after the application of subsection (a),
during the period covered by such report.
(d) Sense of Congress.--It is the sense of the Congress that--
(1) the savings accruing to the Postal Service as a result
of the enactment of this Act will be sufficient to allow the
Postal Service to fulfill its commitment to hold postage rates
unchanged until at least 2006;
(2) because the Postal Service still faces substantial
obligations related to postretirement health benefits for its
current and former employees, some portion of the savings
referred to in paragraph (1) should be used to address those
unfunded obligations; and
(3) none of the savings referred to in paragraph (1) should
be used in the computation of any bonuses for Postal Service
executives.
(e) Postal Service Proposal.--
(1) In general.--The United States Postal Service shall, by
September 30, 2003, prepare and submit to the President, the
Congress, and the General Accounting Office its proposal
detailing how any savings accruing to the Postal Service as a
result of the enactment of this Act, which are attributable to
any fiscal year after fiscal year 2005, should be expended.
(2) Matters to consider.--In preparing its proposal under
this subsection, the Postal Service shall consider--
(A) whether, and to what extent, those future
savings should be used to address--
(i) debt repayment;
(ii) prefunding of postretirement
healthcare benefits for current and former
postal employees;
(iii) productivity and cost saving capital
investments;
(iv) delaying or moderating increases in
postal rates; and
(v) any other matter; and
(B) the work of the President's Commission on the
United States Postal Service under section 5 of
Executive Order 13278 (67 Fed. Reg. 76672).
(3) GAO review and report.--Not later than 60 days after
the Postal Service submits its proposal pursuant to paragraph
(1), the General Accounting Office shall prepare and submit a
written evaluation of such proposal to the Committee on
Government Reform of the House of Representatives and the
Committee on Governmental Affairs of the Senate.
(4) Legislative action.--Not later than 180 days after it
has received both the proposal of the Postal Service and the
evaluation of such proposal by the General Accounting Office
under this subsection, Congress shall revisit the question of
how the savings accruing to the Postal Service as a result of
the enactment of this Act should be used.
(f) Determination and Disposition of Surplus.--
(1) In general.--If, as of the date under paragraph (2),
the Office of Personnel Management determines (after
consultation with the Postmaster General) that the computation
under section 8348(h)(1)(A) of title 5, United States Code,
yields a negative amount (hereinafter referred to as a
``surplus'')--
(A) the Office shall inform the Postmaster General
of its determination, including the size of the surplus
so determined; and
(B) the Postmaster General shall submit to the
Congress a report describing how the Postal Service
proposes that such surplus be used, including a draft
of any legislation that might be necessary.
(2) Determination date.--The date to be used for purposes
of paragraph (1) shall be September 30, 2025, or such earlier
date as, in the judgment of the Office, is the date by which
all postal employees under the Civil Service Retirement System
will have retired.
(g) Definitions.--For purposes of this section--
(1) the savings accruing to the Postal Service as a result
of the enactment of this Act shall, for any fiscal year, be
equal to the amount (if any) by which--
(A) the contributions that the Postal Service would
otherwise have been required to make to the Civil
Service Retirement and Disability Fund for such fiscal
year if this Act had not been enacted, exceed
(B) the contributions made by the Postal Service to
such Fund for such fiscal year; and
(2) the term ``postal debt'' means the outstanding
obligations of the Postal Service, as determined under chapter
20 of title 39, United States Code.
SEC. 4. EFFECTIVE DATE.
This Act and the amendments made by this Act shall become effective
on the date of the enactment of this Act, except that the amendments
made by section 2(b) shall apply with respect to pay periods beginning
on or after such date.
Passed the Senate April 2, 2003.
Attest:
Secretary.
108th CONGRESS
1st Session
S. 380
_______________________________________________________________________
AN ACT
To amend chapter 83 of title 5, United States Code, to reform the
funding of benefits under the Civil Service Retirement System for
employees of the United States Postal Service, and for other purposes.