PEN Editor: Below is a summary of H.R. 756, the Postal Service Reform Act of 2017. The complete bill may be read here. We DO NOT agree with this legislation in many areas, but it appears that our unions and management associations, along with major mailers, will get this bill forced through – think about this the next time you decide who to vote for as your union president and officers as well as your elected government officials…both democrat and republican. USPS, its’ employees, and our nations postal customers will NOT be pleased with the results of this legislation. WE CANNOT ANSWER QUESTIONS REGARDING THIS LEGISLATION. Rick Owens – PEN

Postal Service Reform Act of 2017

Summary

TITLE I – POSTAL SERVICE BENEFITS REFORM

Postal Service Health Benefits Program

• Establishes separately rated postal plans within the Federal Employees Health Benefits

Program (FEHBP) beginning in January 2019.

• FEHBP carriers currently insuring at least 1,500 postal employees and retirees, as well as any

other carriers may offer postal plans.

• Almost all postal employees and retirees who elect coverage through FEHBP must enroll in

one of the postal FEHBP plans.

• Medicare eligible Postal Service retirees and family members are automatically enrolled in

Medicare Part A and B.

• The Postal Service will cover a decreasing portion of the Medicare Part B premium for

current retirees transitioned into Medicare as a result of the legislation over a 4-year

transition period: 75% in the first year; 50% in the second year; 25% in the third year; and

0% in the fourth year.

Postal Service Retiree Health Care Benefit Funding Reform

• Requires the Postal Service to make actuarially-based Retiree Health Benefit (RHB)

prefunding payments to cover 100% of the cost of the Postal Service’s RHB liability within

40 years.

• Addresses the prefunding schedule established in the Postal Accountability and Enhancement

Act of 2006.

Postal Service Pension Funding Reform

• Calculates the Postal Service’s pension costs and liabilities using the salary growth and

demographic assumptions that are specific to the Postal Service population instead of the

government-wide population, as in current law.

• Any surplus within the Postal Service’s Civil Service Retirement System or Federal

Employees Retirement System accounts must be amortized over 30 years and returned to the

Postal Service.

TITLE II – POSTAL SERVICE OPERATIONS REFORM

Governance Reform

• Establishes 5 Presidentially-appointed, Senate confirmed Postal Service Governor positions

with 7-year terms. (There are 9 current Governor positions.)

• The Board of Governors of the Postal Service will include the Governors, the PMG, and the

Deputy PMG.

• The PMG is explicitly tasked to carry out the power of the Postal Service in a manner

consistent with a strategy set by the Board of Governors.

• Requires the Postal Regulatory Commission (PRC) to pay the Department of State’s costs of

negotiating international postal rates.

• Clarifies the PRC’s existing authority to levy fines against the Postal Service, payable to the

U.S. Treasury for deliberate noncompliance with the provisions of title 39.

Conversion to Secure, Centralized Delivery

• Requires the incremental conversion to centralized delivery of business addresses identified

by the Postal Service.

• Requires the voluntary conversion to centralized or cluster box delivery of residential

addresses identified by the Postal Service where 40% of the residents consent to conversion.

• Maintains door delivery of mail for residents who do not consent to voluntary conversion;

however, any future or new residents of an area that has been converted will receive the

converted delivery type.

• A conversion waiver is allowed in cases of physical hardship.

Postal Rates

• Allows the Postal Service to increase postal rates for market-dominant products by 2.15%, 1

cent, for a First-Class stamp.

• Requires the PRC to complete its full review of the market-dominant rate system by January

1, 2018.

• Establishes priority factors for consideration in the PRC’s rate review, including the Postal

Service’s financial stability, the effect of rate increases upon users of the mail, the reliability

of delivery timelines and service standards, the available alternative means of communicating

and sharing information, and the requirement that all costs incurred are appropriately covered

by the revenue from the product for which they were incurred.

• Eliminates state and national political committees’ eligibility for non-profit mail rates.

Nonpostal Services

• Authorizes the Postal Service to provide nonpostal services to state, local, and tribal

governments and other federal agencies.

• Requires public notice and comment and approval by Board of Governors before the Postal

Service offers such service.

• Requires the Postal Service to submit an annual report to the PRC analyzing the costs,

revenues, rates, and quality of service for each nonpostal service agreement.

• Requires the PRC to allow for public comment on the Postal Service’s report.

• The PRC must then make a compliance determination and noncompliance constitutes failure

of the price charged for the service to fully cover the Postal Service’s costs.

• In case of noncompliance, the PRC shall prescribe remedial action to the Postal Service. The

PRC may order the Postal Service to discontinue a nonpostal service if the Postal Service

persistently fails to meet cost coverage requirements.

Fair Stamp-Evidencing Competition

• Requires the Postal Service to abide by the same regulations it requires of private companies

when offering metered postage systems that create individual postage labels for letters or

packages.

Efficient and Flexible Universal Postal Service

• Requires the Postal Service to consider additional factors when evaluating whether or not to

close a post office: distance to next post office, characteristics of the location, including

weather and terrain, and the availability of broadband.

• Shortens the deadline for the PRC to review the Postal Service’s decision to close or

consolidate a post office from 120 to 60 days.

• Allows communities the opportunity to provide input on their preference as to the closing or

consolidation or alternative options for access to postal services.

• Permits appeals regarding the closing or consolidation of post office stations and branches.

Review of Postal Service Cost Allocation Guidelines

• Requires the PRC to conduct a one-time review of the Postal Service’s cost allocation

methodologies.

TITLE III – POSTAL SERVICE PERSONNEL

Chief Innovation Officer

• Requires the Postal Service to establish and appoint a Chief Innovation Officer to manage the

Postal Service’s development and implementation of innovative postal and nonpostal

products and services.

Inspector General of the Postal Community

• Consolidates the Postal Service and the PRC Offices of Inspector General into a newly

established Inspector General for the Postal Community.

MSPB Appeal Rights

• Provides non-bargaining, non-supervisory employees access to the Merit Systems Protection

Board.

TITLE IV – POSTAL CONTRACTING REFORM

Contracting Reforms

• Requires the Postal Service and PRC to issue a policy on the delegation of contracting

authority, post noncompetitive contract awards meeting certain dollar value thresholds, and

improve oversight and response to potential conflicts of interest regarding contracting