Overpayment into Post Office retirement creates slush fund

by YankeeJim | November 3, 2011 at 04:51 am

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How many things are wrong with this picture?

Congress overpaid the Post Office retirement account by an enormous amount. Now, Congress wants to tap the excess to 1) buyout employees so they will retire off the payroll, 2) apply the balance to the underfunded PO budget. In the end, the PO still has an insolvent business model. Nice work executive branch and Congress.

“Senators unveil bipartisan Postal Service rescue plan

By Ed O’Keefe, Published: November 2

A bipartisan Senate bill introduced Wednesday would give the U.S. Postal Service about $7 billion to pay for employee buyouts and other debt, allow a renegotiation of postal worker health-care benefits and require two years of studies before ending Saturday mail deliveries.

The plan, a modified version of proposals previously introduced by Sens. Thomas R. Carper (D-Del.) and Susan Collins (R-Maine), will be considered by a Senate committee Wednesday.

The bill refunds about $7 billion that auditors agree the Postal Service has overpaid into federal worker retirement accounts. The money would be used in part to offer buyouts of up to $25,000 to as many as 100,000 eligible postal workers, with the rest of the funds put toward other debt.

Refunding the money “is not a bailout,” Sen. Joseph I. Lieberman (I-Conn.) said. “It’s the result of a legal analysis that everybody agrees with, that this was in fact an overpayment by the Postal Service” into theFederal Employee Retirement System.”