[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 380 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                 S. 380

   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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 12, 2003

Ms. Collins (for herself, Mr. Carper, and Mr. Brownback) introduced the 
 following bill; which was read twice and referred to the Committee on 
                          Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
   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'' the first place 
                that term appears and inserting ``normal cost 
                percentage''; and
                    (B) by inserting ``and standards (using dynamic 
                assumptions)'' after ``practice'';
            (2) by striking paragraph (18) and inserting the following:
            ``(18) `Fund balance'--
                    ``(A) means the current net assets of the Fund 
                available for payment of benefits, as determined by the 
                Office in accordance with appropriate accounting 
                standards; and
                    ``(B) shall not include any amount attributable 
                to--
                            ``(i) the Federal Employees' Retirement 
                        System; or
                            ``(ii) 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;'';
            (3) in paragraph (27), by striking ``and'' at the end;
            (4) in paragraph (28), by striking the period and inserting 
        ``; and''; and
            (5) 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, Contributions, and Deposits.--Section 8334 of title 
5, United States Code, is amended by striking the matter following the 
section heading through paragraph (1) and inserting the following:
    ``(a)(1)(A) The employing agency shall deduct and withhold from the 
basic pay of an employee, Member, congressional employee, law 
enforcement officer, firefighter, bankruptcy judge, judge of the United 
States Court of Appeals for the Armed Forces, United States magistrate 
judge, Court of Federal Claims judge, member of the Capitol Police, 
member of the Supreme Court Police, or nuclear materials courier, as 
the case may be, the percentage of basic pay applicable under 
subsection (c).
    ``(B)(i) Except in the case of an employee of the United States 
Postal Service, an equal amount shall be contributed from the 
appropriation or fund used to pay the employee or, in the case of an 
elected official, from an appropriation or fund available for payment 
of other salaries of the same office or establishment. When an employee 
in the legislative branch is paid by the Chief Administrative Officer 
of the House of Representatives, the Chief Administrative Officer may 
pay from the applicable accounts of the House of Representatives the 
contribution that otherwise would be contributed from the appropriation 
or fund used to pay the employee.
    ``(ii) In the case of an employee of the United States Postal 
Service, an amount shall be contributed from the appropriation or fund 
used to pay the employee equal to the difference between--
            ``(I) the product of--
                    ``(aa) the basic pay of that employee; and
                    ``(bb) the normal cost percentage applicable to the 
                employee category of that employee under paragraph 
                (1)(A); and
            ``(II) the product of--
                    ``(aa) the basic pay of that employee; and
                    ``(bb) the percentage applicable to that employee 
                under subsection (c) deducted from basic pay under 
                paragraph (1)(A).''.
    (c) Civil Service Retirement and Disability Fund.--
            (1) In general.--Section 8348 of title 5, United States 
        Code, is amended by striking subsection (h) and inserting the 
        following:
    ``(h)(1)(A) In this subsection, the term `Postal supplemental 
liability' means the estimated excess, as determined by the Office of 
Personnel Management, of the difference between--
            ``(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; and
            ``(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 under section 8334;
                    ``(II) the actuarial present value of the future 
                contributions to be made under 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 employees of the United 
                States Postal Service, 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 included in the computation under clause 
(i) shall not be included in computation of the payment required under 
subsection (g)(2).
    ``(2)(A) Not later than June 30, 2004, the Office of Personnel 
Management 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 
valuation of the Civil Service Retirement System.
    ``(E) The United States Postal Service shall pay the amounts 
determined under this paragraph for deposit in the Fund, with payments 
due not later than the date scheduled by the Office.
    ``(3) Notwithstanding any other provision of law, in computing the 
amount of any payment under any provision other than this subsection 
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.''.
            (2) Technical and conforming amendment.--Section 8334 of 
        title 5, United States Code, is amended by striking subsection 
        (m).
    (d) Other Payments.--
            (1) In general.--Section 7101(c) of the Omnibus Budget 
        Reconciliation Act of 1990 (5 U.S.C. 8348 note; Public Law 101-
        508; 104 Stat. 1388-331) is repealed.
            (2) Effect on prior payments.--The repeal under paragraph 
        (1) shall have no effect on payments made under the repealed 
        provisions before the date of enactment of this Act.

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 shall be used to 
reduce the postal debt to such extent and in such manner as the 
Secretary of the Treasury shall specify, consistent with succeeding 
provisions of this section.
    (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 in accordance with paragraph (2).
            (2) Methodology.--Not later than July 31, 2003, for fiscal 
        year 2003, and October 1 of the fiscal year before each fiscal 
        year beginning after September 30, 2003, and before the date 
        specified in paragraph (4), the Office of Personnel Management 
        shall--
                    (A) formulate a plan specifically enumerating the 
                methods 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.--Each such 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.
            (4) Duration.--Nothing in this subsection or subsection (a) 
        shall be considered to apply with respect to any fiscal year 
        beginning on or after October 1, 2007.
    (c) Reporting Requirement.--The Postal Service shall include in 
each report which is rendered under section 2402 of title 39, United 
States Code, and which relates to any period after the date of the 
enactment of this Act and before the date specified in subsection 
(b)(4), 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) Postal Debt Defined.--For purposes of this section, the term 
``postal debt'' means the outstanding obligations of the Postal 
Service, as determined under chapter 20 of title 39, United States 
Code.
    (e) 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 to pay bonuses to Postal Service executives.
    (f) Report Relating to Unfunded Healthcare Costs.--
            (1) In general.--The United States Postal Service shall, by 
        December 31, 2003, in consultation with the General Accounting 
        Office, prepare and submit to the President and the Congress a 
        report describing how the Postal Service proposes to address 
        its obligations relating to unfunded postretirement healthcare 
        costs of current and former postal employees.
            (2) President's commission.--In preparing its report under 
        this subsection, the Postal Service should consider the report 
        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 30 days after 
        the Postal Service submits its report pursuant to paragraph 
        (1), the General Accounting Office shall prepare and submit a 
        written evaluation of such report to the Committee on 
        Government Reform of the House of Representatives and the 
        Committee on Governmental Affairs of the Senate.
    (g) 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.

SEC. 4. EFFECTIVE DATE.

    (a) In General.--This Act shall take effect on the date of 
enactment of this Act.
    (b) Application.--Section 8334(a)(1)(B)(ii) of title 5, United 
States Code (as added by section 2(b) of this Act), shall apply only 
with respect to pay periods beginning on or after the date of enactment 
of this Act.
                                 <all>