Postal Service (USPS) and mandated that it operate as a self-supporting, wholly governmental entity. Previously, the federal government provided postal services via the U.S. Post Office Department (USPOD), a federal agency that was financially dependent upon annual appropriations from Congress. The PRA designed USPS to be a marketized government agency, that is, an agency that would cover its operating costs with revenues generated through the sales of postage and related products and services. Although USPS does receive an annual appropriation, the agency does not rely on appropriations. Its appropriation is approximately $90 million per year, about 0.1% of USPS's $65 billion operating budget. USPS employees are covered by, and may be eligible for, benefits under the same two pension plans that cover nearly all civilian federal workers: the Civil Service Retirement System (CSRS) for employees first hired before 1984 and the Federal Employees' Retirement System (FERS) for employees first hired in 1984 or later. In addition, by law, USPS retirees (and employees) may participate in the Federal Employees Health Benefits Program (FEHBP). USPS's recent deficits—$40 billion since FY2007—have prompted much discussion over possible reforms to the agency and its operations. USPS's retiree health benefits and pension funding policies have been part of this discussion, in part because they represent significant costs to the agency. In FY2013, prefunding USPS's retiree health benefits cost the agency $5.6 billion and funding its pensions cost $5.7 billion. This amounted to 15.7% of USPS's $72.1 billion operating expenses. Recent USPS Retiree Health Benefits Funding Issues10

Since FY2007, USPS has been required to prefund its current employees' future retirement benefits. In short, although the law states USPS must pay more than $5 billion per year through FY2017, the agency has not had sufficient cash to make all these payments. Between FY2007 and FY2012, USPS's financial condition eroded considerably. Recent Proposals for Changing the Prefunding Policy

In the 113 th Congress, bills were introduced to change the current RHBF policy. These bills included
The Postal Service Protection Act of 2013 ( H.R. 630 ) and ( S. 316 ), which would have abolished the RHBF prefunding policy and RHBF payment schedule. H.R. H.R. S. 1486 also would have attempted to reduce USPS's long-term retiree health benefits costs by moving some USPS retirees onto Medicare and authorizing USPS to opt its employees (and future retirees) out of the FEHBP and into a new health insurance program. Finally, the bill aimed to further reduce USPS's prefunding costs by requiring USPS to fund 80% of its total liability (as opposed to the current 100% funding requirement). Absent a reduction in the cost of financing CSRS pensions, a reduction in the proportion of CSRS pension costs allocated to USPS—as under the USPSOIG and PRC reports—would increase the current unfunded liability of the Civil Service Retirement and the Disability Fund (CSRDF), the federal trust fund that finances CSRS and FERS benefits. H.R. The Postal Reform Act of 2013 ( H.R. The Postal Reform Act of 2013 ( H.R.
Congress designed the U.S. Postal Service (USPS) to be a self-supporting government agency. Since 1971, the agency has not relied upon annual appropriations to cover its operating costs. Rather, USPS has funded its operations mostly through the sales of postage and postal products and services.
Since FY2007, however, the agency has run more than $40 billion in deficits and has reached its statutory borrowing limit ($15 billion). The agency does receive an annual appropriation of approximately $90 million per year, which amounts to about 0.1% of USPS's $65 billion operating budget.
USPS's troubled financial condition has raised concerns about the viability of the agency. Many postal reform bills were introduced in the 113th and 112th Congresses. These bills proposed altering many aspects of postal operations, from raising mailing rates to reducing delivery days and closing USPS post offices and mail sorting facilities.
Postal reform bills also have proposed altering funding policies for USPS's retiree healthcare and pensions. Alterations to these policies could significantly affect USPS's financial condition. In FY2013, prefunding USPS's retiree health benefits cost the agency $5.6 billion and funding its pensions cost $5.7 billion. These costs constituted 15.7% of the agency's operating expenses.
USPS employees are covered by the same retirement plans as most other civilian federal employees: the Civil Service Retirement System (CSRS) and the Federal Employees' Retirement System (FERS). In addition, USPS retirees (and employees) participate in the Federal Employees Health Benefits Program (FEHBP). Since FY2007, USPS has been required by law to prefund its current employees' future retirement health benefits at a cost of more than $5 billion per year. USPS has lacked sufficient cash to make all of these payments.
A number of bills were introduced in the 113th Congress to improve USPS's financial condition by altering current pension and retiree health benefits funding policies. Bills carrying provisions to alter the funding of USPS retiree health benefits included H.R. 630, H.R. 2690, H.R. 2748, and S. 1486. USPS pension funding legislation included H.R. 630, H.R. 961, H.R. 2690, H.R. 2748, S. 316, and S. 1486.
The aforementioned USPS retiree health benefits bills would have reduced the Postal Service's annual operating expenses by abolishing or reworking the current statutory prefunding schedule; moving some USPS retirees on to Medicare; or lowering the target for prefunding from the current 100% funding requirement to 80% of the estimated total liability.
USPS pension-related bills aimed to aid the Postal Service's financial condition by either changing the costs allocation between the Postal Service and the federal government in the funding of USPS's CSRS benefits or recalculating USPS's FERS costs. In both instances, the legislation would have refunded sums from the federal government to USPS.