U.S. Postal Service: Allocation of Responsibility for Pension Benefits between the Postal Service and the Federal Government

The Office of Personnel Management (OPM) is responsible for administering the Civil Service Retirement System (CSRS), including the United States Postal Service (USPS) CSRS benefits. Two independent agencies--USPS Office of Inspector General (OIG) and Postal Regulatory Commission (PRC)--have issued reports stating that OPM's current method of allocating responsibility for CSRS benefits allocates a disproportionately large share to USPS. The USPS OIG and the PRC proposed alternate methodologies that they estimate would shift responsibility for from $56 billion to $85 billion in CSRS benefits from USPS to the federal government. GAO's objectives were to comment on (1) whether OPM's current methodology for allocating responsibility for CSRS benefits between USPS and the federal government is consistent with the law, (2) the analysis used by the USPS OIG and PRC to conclude that OPM should refund the CSRS contributions in question, (3) the potential impacts such a refund would have on the CSRS fund and CSRS stakeholders, and (4) the potential impacts that such a refund would have on USPS's financial outlook. GAO reviewed legislation regarding the allocation of responsibility for CSRS benefits and methodologies used in all three reports. OPM and the OPM OIG agreed with GAO's draft report, but USPS and the USPS OIG stated that OPM's methodology was not consistent with current law and they, in addition to the PRC, reiterated their views that the cost allocation is unfair. GAO continues to believe that its analysis is accurate.