2006, for all new employees hired after 2002. These costs will be fully funded for all new hires dating from 2003, the effective date of Public Law 108–18. Additionally, this proposal provides a funding source for the annual cost of these benefits for all retirees, accomplishing a fully financed postretirement health benefit program.

     The GAO's evaluation of these proposals was submitted to Congress on November 26, 2003. In accordance with the Act, Congress then has 180 days to revisit the issue of the escrow account.

     Separately, the Postal Service has taken issue with the methodology OPM has used to calculate Postal Service CSRS obligations. One part of the analysis is a method to determine how much of the CSRS pension cost for employees who served both in the former Post Office Department and later in the Postal Service was attributable to their service time

before the creation of the Postal Service on July 1, 1971, for which the Government rather than the Postal Service remains responsible. The Postal Service believes that the OPM allocation methodology assigns an unreasonably high proportion of the burden of funding these benefits to the Postal Service. The Postal Service, in a letter dated July 22, 2003, requested OPM to reconsider its proposed methodology and consider an alternate allocation methodology proposed by the Postal Service. That proposed alternative allocation methodology was consistent with the approach previously used by OPM to allocate the increase in CSRS pension costs created by annual cost-of-living-adjustments (COLAs) granted to retirees. On July 31, 2003, OPM rejected this Postal Service proposal.