139 
HR 22 PCS 
(A) in the matter before paragraph (1), by 
striking all that follows ‘‘nonmailable’’ and pre-
cedes ‘‘(h),’’ and inserting ‘‘under section 
3001(d),’’; and 
(B) in the sentence following paragraph 
(3), by striking all that follows ‘‘nonmailable’’ 
and precedes ‘‘(h),’’ and inserting ‘‘under such 
section 3001(d),’’; 
(4) in section 3210(a)(6)(C), by striking the 
matter after ‘‘if such mass mailing’’ and before 
‘‘than 60 days’’ and inserting ‘‘is postmarked 
fewer’’; and 
(5) by striking the heading for section 3627 
and inserting the following: 
‘‘§ 3627. Adjusting free rates’’. 
TITLE 
IX—POSTAL 
PENSION 
FUNDING 
REFORM 
AMEND-
MENTS 
SEC. 901. CIVIL SERVICE RETIREMENT SYSTEM. 
(a) TERMINATION OF OBLIGATION TO PAY GOVERN-
MENT
CONTRIBUTIONS.—Section 8334(a)(1)(B)(ii) of 
title 5, United States Code, is amended by striking all that 
follows ‘‘be equal to’’ and inserting ‘‘zero.’’. 
(b) DETERMINATION AND DISPOSITION OF POSTAL 
SURPLUS
OR
SUPPLEMENTAL
LIABILITY.—Section
140 
HR 22 PCS 
8348(h) of title 5, United States Code, is amended to read 
as follows: 
‘‘(h)(1) For purposes of this subsection, a Postal sur-
plus (or supplemental liability) is the amount, as esti-
mated by the Office, by which— 
‘‘(A) the actuarial present value of all future 
benefits which are payable from the Fund under this 
subchapter to current or former employees of the 
United States Postal Service, or their survivors, and 
attributable to civilian employment with the Postal 
Service, is less than (or greater than) 
‘‘(B) the sum of— 
‘‘(i) the actuarial present value of deduc-
tions to be withheld from the future basic pay 
of employees of the Postal Service currently 
subject to this subchapter pursuant to section 
8334; 
‘‘(ii) that portion of the Fund balance, as 
of the date such surplus or supplemental liabil-
ity is determined, attributable to payments to 
the Fund by the Postal Service and its employ-
ees, plus the earnings on such amounts while in 
the Fund; and 
‘‘(iii) any other appropriate amount, as de-
termined by the Office in accordance with gen-
141 
HR 22 PCS 
erally accepted actuarial practices and prin-
ciples. 
‘‘(2)(A)(i) Not later than June 15, 2006, the Office 
shall determine the Postal surplus or supplemental liabil-
ity as of September 30, 2005. 
‘‘(ii) If a supplemental liability is determined under 
this subparagraph for fiscal year 2005, the Office shall 
establish an amortization schedule, including a series of 
equal annual installments commencing September 30, 
2006, which provides for the liquidation of such liability 
by September 30, 2043. 
‘‘(iii) If a surplus is determined under this subpara-
graph for fiscal year 2005, the amount of the surplus shall 
be transferred to the Postal Service Retiree Health Bene-
fits Fund by June 30, 2006. 
‘‘(B)(i) For each of fiscal years 2006 through 2038, 
the Office shall determine the Postal surplus or supple-
mental liability as of the close of such fiscal year, with 
each such determination to be made by June 15th of the 
following fiscal year. 
‘‘(ii) If a supplemental liability is determined under 
this subparagraph for a fiscal year, the Office shall estab-
lish an amortization schedule, including a series of equal 
annual installments commencing on September 30 of the
142 
HR 22 PCS 
following fiscal year, which provides for the liquidation of 
such liability by September 30, 2043. 
‘‘(iii)(I) If a surplus of $500,000,000 or more is de-
termined under this subparagraph for a fiscal year, the 
amount of the surplus shall be transferred to the Postal 
Service Retiree Health Benefits Fund by June 30th of the 
following fiscal year. 
‘‘(II) If a surplus of less than $500,000,000 is deter-
mined under this subparagraph for a fiscal year, the sur-
plus shall remain in the Fund, subject to transfer in a 
subsequent fiscal year under subclause (I) or subpara-
graph (C)(iii). 
‘‘(C)(i) Not later than June 15, 2040, the Office shall 
determine the Postal surplus or supplemental liability as 
of September 30, 2039. 
‘‘(ii) If a supplemental liability is determined under 
this subparagraph for fiscal year 2039, the Office shall 
establish an amortization schedule, including a series of 
equal annual installments commencing September 30, 
2040, which provides for the liquidation of such liability 
by September 30, 2043. 
‘‘(iii) If a surplus is determined under this subpara-
graph for fiscal year 2039, the amount of the surplus—
143 
HR 22 PCS 
‘‘(I) shall be applied first toward reducing the 
amount of any supplemental liability described in 
section 8423(b)(1)(B); and 
‘‘(II) to the extent that any portion of such sur-
plus remains after the application of subclause (I), 
shall, not later than June 30, 2040, be transferred 
to the Postal Service Retiree Health Benefits Fund. 
‘‘(D) An amortization schedule under this para-
graph— 
‘‘(i) shall be established in accordance with gen-
erally accepted actuarial practices and principles, 
with interest computed at the rate used in the most 
recent valuation of the Civil Service Retirement Sys-
tem; 
‘‘(ii) shall supersede any amortization schedule 
previously established under this paragraph; and 
‘‘(iii) shall not be taken into account, for pur-
poses of any determination of Postal surplus or sup-
plemental liability, except to the extent of any 
amounts under such schedule actually paid. 
‘‘(E)(i) The Postal Service shall pay to the Office the 
amounts due under any amortization schedule established 
under this paragraph, to the extent not superseded or can-
celed.
144 
HR 22 PCS 
‘‘(ii) A determination under subparagraph (B)(i) or 
(C)(i) that no supplemental liability exists shall cancel any 
amortization schedule previously established under this 
paragraph, to the extent of any amounts first coming due 
after the close of the fiscal year to which such determina-
tion relates. 
‘‘(3) Notwithstanding any other provision of law, in 
computing the amount of any payment under any other 
subsection of this section that is based on the amount of 
the unfunded liability, such payment shall be computed 
disregarding that portion of the unfunded liability that the 
Office determines will be liquidated by payments under 
this subsection. 
‘‘(4) As used in this subsection, ‘Postal Service Re-
tiree Health Benefits Fund’ refers to the Postal Service 
Retiree Health Benefits Fund, as established by section 
8909a.’’. 
(c) PROVISIONS RELATING TO AMOUNTS FOR MILI-
TARY SERVICE.—In the application of paragraph (2) of 
section 8348(g) of title 5, United States Code, for fiscal 
year 2006, the Office of Personnel Management shall in-
clude, in addition to the amount otherwise computed 
under that paragraph, the amounts that would have been 
included for fiscal years 2003 through 2005 with respect 
to credit for military service of former employees of the
145 
HR 22 PCS 
United States Postal Service if Public Law 108-18 had 
not been enacted (including earnings thereon) and the 
Secretary of the Treasury shall make the required transfer 
to the Civil Service Retirement and Disability Fund based 
on that amount. 
(d) REVIEW.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of this section, any determination or rede-
termination made by the Office of Personnel Man-
agement under this section shall, upon request of 
the United States Postal Service, be subject to re-
view by the Postal Regulatory Commission. The 
Commission shall submit a report containing the re-
sults of any such review to the Postal Service, the 
Office of Personnel Management, and the Congress. 
(2) RESPONSE.—Upon receiving the report of 
the Postal Regulatory Commission, the Office of 
Personnel Management shall reconsider its deter-
mination or redetermination in light of such report, 
and shall make any appropriate adjustments. The 
Office shall submit a report containing the results of 
its reconsideration to the Commission, the Postal 
Service, and the Congress.
146 
HR 22 PCS 
SEC. 902. HEALTH INSURANCE. 
(a) IN GENERAL.—Chapter 89 of title 5, United 
States Code, is amended— 
(1) in section 8906(g)(2)(A), by striking ‘‘by 
the United States Postal Service.’’ and inserting 
‘‘first from the Postal Service Retiree Health Bene-
fits Fund up to the amount contained therein, with 
any remaining amount paid by the United States 
Postal Service.’’; 
(2) by inserting after section 8909 the fol-
lowing: 
‘‘§ 8909a. Postal Service Retiree Health Benefits Fund 
‘‘(a) There is in the Treasury of the United States 
a Postal Service Retiree Health Benefits Fund (herein-
after in this section referred to as the ‘Fund’) which is 
administered by the Office of Personnel Management. Any 
amounts 
transferred 
to 
the 
Fund 
under 
section 
8348(h)(2) shall yield interest at a rate equal to the 
weighted average yield of all the investments in the Civil 
Service Retirement and Disability Fund as of the date of 
transfer. All other investments of amounts in the Fund 
shall be made in accordance with subsections (c)–(e) of 
section 8348. 
‘‘(b) The Fund is available without fiscal year limita-
tion for payments required by section 8906(g)(2).
147 
HR 22 PCS 
‘‘(c)(1) Not later than June 30, 2006, and by June 
30 of each succeeding year, the Office of Personnel Man-
agement shall compute the net present value of the excess 
of future payments required by section 8906(g)(2)(A) for 
current and future United States Postal Service annu-
itants over the value of the assets of the Fund as of the 
end of the fiscal year ending on September 30 of that year. 
The actuarial costing method to be used by the Office and 
all actuarial assumptions shall be established by the Office 
after consultation with the United States Postal Service 
and must be in accordance with generally accepted actu-
arial practices and principles. 
‘‘(2) Not later than September 30, 2006, and by Sep-
tember 30 of each succeeding year, the Office shall com-
pute and the United States Postal Service shall pay into 
such Fund— 
‘‘(A) the portion of the net present value de-
scribed in paragraph (1) attributable to the current 
year’s service of Postal Service employees; and 
‘‘(B) interest on the net present value described 
in paragraph (1) for that fiscal year, at the interest 
rate used in computing that net present value; 
except that the amount otherwise payable by the Postal 
Service under the preceding provisions of this paragraph 
by not later than September 30, 2006, shall be reduced
148 
HR 22 PCS 
by the total contributions made by the Postal Service 
under section 8906(g)(2) and attributable to fiscal year 
2006 (as determined by the Office). 
‘‘(3)(A) Any computation or other determination of 
the Office under this subsection shall, upon request of the 
Postal Service, be subject to review by the Postal Regu-
latory Commission. The Commission shall submit a report 
containing the results of any such review to the Postal 
Service, the Office of Personnel Management, and the 
Congress. 
‘‘(B) Upon receiving the report of the Postal Regu-
latory Commission, the Office of Personnel Management 
shall reconsider its computation or other determination in 
light of such report, and shall make any appropriate ad-
justments. The Office shall submit a report containing the 
results of its reconsideration to the Commission, the Post-
al Service, and the Congress. 
‘‘(4) The Office shall promulgate, after consultation 
with the United States Postal Service, any regulations it 
deems necessary under this subsection.’’; and 
(3) in the analysis by inserting after the item 
relating to section 8909 the following: 
‘‘8909a. Postal Service Retiree Health Benefits Fund.’’. 
(b) REVIEW.— 
(1) IN GENERAL.—Any regulation established 
under section 8909a(c)(4) of title 5, United States
149 
HR 22 PCS 
Code (as amended by subsection (a)) shall, upon re-
quest of the Postal Service, be subject to review by 
the Postal Regulatory Commission. The Commission 
shall submit a report containing the results of any 
such review to the Postal Service, the Office of Per-
sonnel Management, and the Congress. 
(2) RESPONSE.—Upon receiving the report of 
the Postal Regulatory Commission, the Office of 
Personnel Management shall reconsider its regula-
tion in light of such report, and shall take such ac-
tion as it considers appropriate. The Office shall 
submit a report containing the results of its recon-
sideration to the Commission, the Postal Service, 
and the Congress. 
SEC. 903. REPEALER. 
Section 3 of Public Law 108–18 is repealed. 
SEC. 904. ENSURING APPROPRIATE USE OF ESCROW AND 
MILITARY SAVINGS. 
(a) DEFINITION.—For purposes of this section, the 
term ‘‘total savings’’ means, for any fiscal year, the 
amount equal to— 
(1) the amount of contributions that the Postal 
Service would otherwise have been required to make 
to the Civil Service Retirement and Disability Fund 
under subchapter III of chapter 83 of title 5, United
150 
HR 22 PCS 
States Code, for such fiscal year if Public Law 108- 
18 and this Act had not been enacted, minus 
(2) the amount of amortization payments (if 
any) required under section 8348(h)(2) of title 5, 
United States Code, for such fiscal year. 
(b) CALCULATIONS.—The following calculations shall 
be made for each of fiscal years 2006 through 2015: 
(1) Not later than January 31 of the fiscal year 
following the fiscal year involved, the Office of Per-
sonnel Management (in consultation with the Postal 
Service) shall determine the total savings for the fis-
cal year. 
(2) On the date of making its determination 
under paragraph (1), the Office shall also determine 
(in consultation with the Postal Service) the amount 
by which— 
(A) the amount the Postal Service paid for 
that fiscal year into the Postal Service Retiree 
Health Benefits Fund in accordance with 
8909a(c)(2) of title 5, United States Code, ex-
ceeds (if at all) 
(B) the amount of payments made by the 
Postal Service for that fiscal year from such 
Fund in order to satisfy the requirements of 
section 8906(g)(2) of such title 5.