Postal Services Rally For New Pension BillBy Andy McKeever, iBerkshires Staff
05:13PM / Wednesday, September 28, 2011 | |
 Local postal employees rallied Tuesday outside of U.S. Rep. John W. Olver's Pittsfield office in support of H.R. bill 1351. |
PITTSFIELD, Mass. — Amidst fear that the U.S. Postal Service is going broke, employees are laying claim to up to $100 billion Congress won't let them have.
Across the nation Tuesday, postal workers rallied in congressional districts in support of a bill that will recalculate pension funds that many claim the service has overpaid for the last 40 years. About a dozen local workers rallied for the bill's passage outside U.S. Rep. John Olver's Pittsfield office on Tuesday in part of the nationwide movement.
"We have $100 billion laying around that we don't have access to," Gary Ghidotti, president of the National Association of Letter Carriers Union local branch, said on Tuesday. "We're not asking for a bailout. It's not going to cost the taxpayers one cent."
According to two studies, the service has been overpaying for pensions accrued prior to 1971 and there is between $50 billion and $75 billion in the Treasury that the bill will shift back to the service.
Recent discussion about the Postal Service closing offices, reducing service and losing money is a Congress-driven crisis, Ghidotti said. In 2006, a law was passed that forces the U.S. Postal Service to begin making annual $5.5 billion payments to fund 75 years of future retirement packages. The service has 10 years to fully fund the liability.
The overpayments from pre-1971 — when the service became more independent and took on pension payments on its own — would fulfill the future pension needs and set the stage for the government to eliminate the $5.5 billion annual payments, Ghidotti said.
The Postal Service already has more than $42 billion set aside for future pensions that it is not allowed to touch and credit for the overpayments would fully fund the mandate, he said.
"If they just gave us this money, we can make that payment," Ghidotti said. "Congress can oversee the stabilization of the Postal Service or its destruction."
After four payments, what would have been a surplus of about $600 million has turned into a deficit with the service being forced to borrow to pay its annual bill, he said. The service's limit to borrow has just about been reached.
Additionally, there is $6.9 billion in surplus that USPS is not able to access without congressional approval. In June, USPS announced that it would suspend making payments to that account in an attempt to keep its cash reserves. Freeing up that surplus alone will make the next payment and give the service more money for operating expenses.
USPS has been self-funded for the last 30 years — including paying its retirement packages — but the 2006 mandate changed that, Ghidotti said. Otherwise the service is posting record-high levels of service, Ghiotti said, and the Postal Service is adapting with technological changes.
"Every time we adapt we've come out a stronger Postal Service," he said.
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