The U.S. Postal Service is looking for outside help to find ways its pension system can save money by bringing it in line with retirement benefits offered by major private-sector companies.
The effort, reflected in requests posted on FedBizOpps.gov, comes amid wrangling between Congress and the mail service over how retirement benefits are funded.
The service is required to pre-fund retiree health benefits to the tune of $5.4 billion to $5.8 billion annually for 10 years ending in 2016. The payments were intended by Congress to fully fund retiree health benefits for 75 years. The Postal Service and its supporters have argued that the payments are dragging it toward insolvency, accounting for all but $9 billion of a $41 billion deficit.
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The Postal Service has defaulted on its last two payments to the pension fund. It challenged Congress earlier this year with a plan to end Saturday mail delivery in August. Congress balked, prohibiting the service reduction. The idea, however, is still on the table.
Rep. Darrell Issa, R-Calif., chairman of the Oversight and Government Committee, backs the service reduction. Other lawmakers have urged approval of other changes intended to get the mail service out of the red.
An outside audit performed in 2012 for the Postal Service said it was overpaying into the Federal Employees Retirement System. The audit said the assumption of how much workers' pay would rise caused the Office of Personnel Management to overestimate future needs.
The Government Accountability Office took a different tack last December in a report looking at the need for the pre-funding. The report was addressed to Issa.
"USPS, employee organizations, and other stakeholders have argued that the prefunding requirement is a major contributor to USPS's financial decline," the GAO said. "We have previously reported that USPS cannot be financially viable until Congress and USPS address the cash-flow problems that limit its immediate prefunding capability while also addressing how to pay for the long-term cost of USPS's unfunded retiree health benefit liability. Projected declines in mail volumes and revenues will continue to exacerbate USPS's difficulties in paying for the cost of its retiree health benefits."
The postal service set a Sept. 6 deadline for proposals. It is also soliciting bids to look at its paid sick-leave and holiday benefits.
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