Section-by-Section Explanation of the POST Act

Section 101 Transfer of Amounts from the Civil Service Retirement and Disability Fund The Postal Service believes that it has paid more than it owes into the Civil Service Retirement System (CSRS). This is due, the Postal Service has argued, to a decision that was made in 1974 about how to divide responsibility between the Postal Service and the federal government for CSRS costs related to postal employees who transitioned over from the former Post Office Department. The division gave the Postal Service responsibility for all post-1970 costs related to these employees pensions, including costs related to pay increases the employees would have received had the Postal Service not been created and they had remained in federal service. Two reports released in recent months by the Postal Services Office of Inspector General and the Postal Regulatory Commission argue that this methodology is unfair, outdated and not consistent with the requirement enacted as part of the Postal Accountability and Enhancement Act (P.L. 109-435) to calculate a Postal surplus or liability for CSRS. The PRC found that the methodology being used by OPM produces an inequitable allocation of responsibilities. This section would amend section 8438(h) of title 5, United States Code. New subparagraph (B) requires the Office of Personnel Management (OPM) to redetermine the Postal Services CSRS obligations each year assuming that a new methodology laying out the division of responsibility between the Postal Service and the federal government had been in place since 1971, when the Postal Service was created. The results of the redetermination are to be reported to the Postal Service by June 30th of each year. Through fiscal year 2016, any surplus owed to the Postal Service may be transferred to the Postal Service Retiree Health Benefits Fund. Beginning in fiscal year 2017, surplus funds may be transferred to the Retiree Health Benefits Fund. If the Postal Service has satisfied all of its obligations to that Fund, surplus funds may be used to fund the Employees Compensation Fund or to pay down the Postal Services debt to the Treasury.

Any disbursement of surplus CSRS funds owed to the Postal Service under new subparagraph (B) would be made at the direction of the Postal Services Board of Governors. Disbursements made through fiscal year 2016 would be capped each year at the amount the Postal Services must pay into the Retiree Health Benefits Fund under section 8909a(d)(3)(A) of title 5, United States Code. Any disbursement would be credited to the Postal Service towards the amounts it owes under the law. This section also lays out the methodology by which OPM must redetermine the Postal Services CSRS obligations. The new methodology would result in the federal government being made responsible to a greater degree for CSRS costs associated with a pay increases received by former Post Office Department employees who transitioned to the Postal Service. The redetermination would apply to all CSRS payments the Postal Service has made since July 1, 1971 and all it is projected to make. The Postal Service would be permitted to appeal any determinations made by OPM to the CSRS Board of Actuaries. Section 102 Transfer of Amounts from the Federal Employees Retirement System The Postal Service also believes that it has paid more than it owes into the Federal Employees Retirement System (FERS). This section requires OPM to determine at the end of each fiscal year whether the Postal Service has a FERS surplus or liability. Through fiscal year 2016, any surplus owed to the Postal Service may be transferred to the Postal Service Retiree Health Benefits Fund. Beginning in fiscal year 2017, surplus funds may be transferred to the Retiree Health Benefits Fund. If the Postal Service has satisfied all of its obligations to that Fund, surplus funds may be used to fund the Employees Compensation Fund or to pay down the Postal Services debt to the Treasury. Any disbursement of surplus FERS funds owed to the Postal Service would be transferred at the direction of the Postal Services Board of Governors. Disbursements made through fiscal year 2016 would be capped each year at the amount the Postal Services must pay into the Retiree Health Benefits Fund under section 8909a(d)(3)(A) of title 5, United States Code. Any disbursement would be credited to the Postal Service towards the amounts it owes under the law.

Beginning in fiscal year 2017, if OPM determines that the Postal Service has a FERS liability. OPM would develop an amortization schedule that would allow the Postal Service to pay down the liability with annual payments made over a period of 30 years. The Postal Service would be permitted to appeal any determinations made by OPM to the CSRS Board of Actuaries. Section 103 Calculating the Postal Service Retiree Health Benefits Fund Liability on Long-Term Funding Basis This section lays out the actuarial assumptions OPM would use in calculating the Postal Services retiree health benefit obligations. These assumptions would be used to develop an amortization schedule of any liability it owes for those obligations starting in fiscal year 2017, as required under current law. Section 104 Requiring OPM to Report the Funding Status Under Board of Actuaries This section would require OPM to provide data to the Postal Service on any Postal Service retiree health obligations it identifies. Section 201 Postal Policy This section deletes language in section 101(b) of title 39 that requires the Postal Service to provide a maximum degree of postal services in certain communities. It also removes a requirement in the same section that prevents the Postal Service from closing a post office solely for operating at a deficit. The Postal Service believes that these changes are necessary so it can be freed to close post offices that are no longer needed or are not sustainable. Section 202 Specific Powers of the United States Postal Service This section would amend section 404(d)(2) of title 39, which deals with the steps the Postal Service must take before closing a post office. The amendment would require that the Postal Service give primary consideration to whether a proposed closing is consistent with eth Postal Services universal service obligations under section 101(b) of title 39.

Section 203 Expansion of Alternate Retail This section would require the Postal Service to develop a plan to be update annually for five years detailing how it plans to expand access to retail alternatives to post offices. Section 204 Service Standards This section would require the Postal Service to use the authority given to it under section 3691 of title 39 to establish service standards that guarantee postal customers a level of retail access to postal services consistent with the Postal Services obligations under section 101(b) of title 39 to provide effective and regular postal services to rural areas, communities, and small towns. Section 205 No Limitation on Changes in Frequency of Mail Delivery This section would reassert the Postal Services authority to change the frequency of mail delivery using the authorities given to it under section 3691 of title 39 to establish service standards. Section 206 Time Limits for Consideration of Service Changes Under current law, if the Postal Service is contemplating a change in its operations that may have a nationwide impact on service, it must file the proposal with the Postal Regulatory Commission. The Commission then reviews the proposal and issues an advisory opinion. The Commissions own regulations envision advisory opinions being issued within 90 days. However, there have been instances in which the Commission has taken much longer to complete its work. For example, the Commissions opinion on the Postal Services recent proposal to eliminate Saturday delivery was issue nine months after the Postal Service filed its proposal with the Commission. This section would place a 90-day time limit on the Postal Regulatory Commissions consideration of proposals by the Postal Service to make a change in its operations that may have a nationwide impact on service. This timeframe is consistent with the Commissions own regulations and is the same limit placed on the Commissions consideration of the data it reviews each year pursuant to section 3651 of title 39 to determine whether the Postal Service is in compliance with the law. The Postal Service would not be permitted to implement its proposal until it has received an advisory opinion
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from the Commission and until 30 days after it has submitted a formal response to that opinion. However, the Postal Service would be able to act on its proposal after 90 days if the Commission fails to issue an advisory opinion within that time period. Section 301 Cooperation with Other Agencies Under current law, the Postal Service is may work with other federal agencies to provide government services in post offices. This section would allow the Postal Service to work in similar ways with state and local governments. Section 302 Wine and Beer Shipping Under current law, private carriers are permitted to ship wine and beer. The Postal Service is not. This section would allow the Postal Service to ship wine and beer by a licensed winery or brewery in accordance with the laws of the state to which the items are addressed and received. The section would further require that the Postal Service issue regulations providing that wine and beer is mailed directly to a person who is at least 21 years old and presenting a valid, government-issued form of identification at the time of delivery. Section 303 Preserving Volume Under current law, the Postal Service is permitted to enter into agreements with individual commercial agreements with customers. This section would delete the requirements that these agreements often called Negotiated Service Agreements either improve the net financial position of the Postal Service through reducing Postal Service costs or increasing the overall contribution to the institutional costs of the Postal Service or enhance the performance of mail preparation, processing, transportation, or other functions. This change would give the Postal Service more freedom to negotiate agreements with mailers that might not improve the Postal Services financial condition but could result in the preservation of existing volume and revenue. The section maintains the requirement that Negotiated Service Agreements not cause unreasonable harm to the marketplace and result in a situation in which each class of mail is still covering its direct and indirect costs. In addition, the section imposes time limits on the Postal Regulatory Commissions consideration of adding new postal services, which would

include Negotiated Service Agreements. The time limits 45 days in some cases, 15 days in others are consistent with those included in Commission regulations. Section 304 Non-Postal Services Under current law, the Postal Service is limited in most cases to offering postal services. The definition of postal services under section 102(5) of title 39 is the delivery of letters, printed matter, or mailable packages, including acceptance, collection, sorting, transportation, or other functions ancillary thereto. This section would allow the Postal Service to offer products and services that are not postal services. A product or service that is not a postal service could be offered after the Postal Regulatory Commission has determined that it utilizes the processing, transportation, delivery, retail network or technology of the Postal Service in a manner that is consistent with the public interest and does not create unfair competition and appropriately classified it on under one of the product classifications in chapter 36 of title 39. Classification of the product would allow it to be regulated like existing products and services. In addition, the section would clarify that things the Postal Service does pursuant to other authorities in existing law such as selling its real estate are not to be treated and regulated like a non-postal service. Section 401 Arbitration; Labor Disputes This section would require that arbitrators in postal labor disputes, in rendering decisions, take into account such relevant factors as: the financial condition of the Postal Service; the rate system; and the requirement in section 1003(a) of title 39 that postal employees compensation be comparable to that of private sector employees. Section 402 Revised Reporting Requirement This section would move the deadline for the submission of the Postal Services annual report to the Postal Regulatory Commission required under section 3652(a) of title 39 from 90 days following the end of a fiscal year to the January 15th after the end of each fiscal year. Section 403 Delegation of Authority

Under current law, the Postal Services Board of Governors must review every contract with a mailer, no matter how small. This section would allow the Board to delegate the authorities granted to it under title 39 as the Board determines appropriate provided that the Board is not relieved of any responsibilities and ensures that all applicable provisions of law are complied with. Section 404 Contract Disputes Act The Contract Disputes Act (P.L. 95-563) governs legal claims brought by parties that do business with the federal government. Amendments to the Act made in 2006 deleted the Postal Service and the Postal Regulatory Commission from its definition of "executive agency while simultaneously codifying the existence of a Postal Service Board of Contract Appeals to decide cases under Act. This altered definition of executive agency has caused some uncertainty regarding whether the Act still applies to the Postal Service and the Commission. This change was apparently inadvertent, as there is no apparent reason for the change and no indication in the legislative history that Congress intended to exclude the Postal Service and the Commission. Absent legislation to explicitly make the Postal Service and the Commission subject to the Act, disputes involving postal contracts being heard in multiple district courts and courts of appeals. This section would add the Postal Service and the Commission back to the definition of executive agency in the Act.