Federal Financing Bank (FFB) may be repurchased at current value at any time with five days' notice of intent to do so.

6    retirement programs

Our employees, retirees and their survivors participate in a pension program of the U.S. government. As an "independent establishment" of the U.S. government, we account for our involvement in these programs as participation in a multi-employer plan arrangement, in accordance with the Statement of Financial Accounting Standards (FAS) 87, Employers' Accounting for Pensions.

With certain exceptions, employees participate in one of the following three retirement programs based upon the starting date of their employment with the Postal Service. Employee and employer contributions are made to the Civil Service Retirement System, the Dual System or the Federal Employees Retirement System, which are administered by the Office of Personnel Management. Employees may also participate in the Thrift Savings Plan, which is a defined contribution retirement savings and investment plan. Postal Service employees are authorized to participate in the Thrift Savings Plan by the Federal Employees Retirement System Act of 1986. The Plan is administered by the Federal Retirement Thrift Investment Board.

Civil Service Retirement System (CSRS)

Under the Postal Reorganization Act, officers and career employees hired prior to January 1, 1984 are covered by the Civil Service Retirement System, which provides a basic annuity. We do not match contributions to the Thrift Savings Plan for employees who participate in CSRS.

Dual Civil Service Retirement System (Dual
CSRS/Social Security System)

Employees with prior U.S. government service who were hired between January 1, 1984, and January 1, 1987, are covered by the Dual Civil Service Retirement System/Social Security System. We and the employee contribute to Social Security at the rate prescribed by law. We do not match contributions to the Thrift Savings Plan for employees who participate in the Dual System.

Federal Employees Retirement System (FERS)

Effective January 1, 1987, officers and career employees hired since December 31, 1983, except those covered by the Dual System, are covered by the

Federal Employees Retirement System Act of 1986. In addition, employees hired before January 1, 1984, could choose during certain periods in 1987, 1988 and 1998 to participate in FERS. This system consists of Social Security, a basic annuity plan, and a Thrift Savings Plan.

We and the employee contribute to Social Security at the rate prescribed by law. In addition, we are required to contribute to the Thrift Savings Plan a minimum of 1% per year of the basic pay of employees covered by this system. We also match a voluntary employee contribution up to 3% of the employee's basic pay, and 50% of a contribution between 3 and 5% of basic pay.

Employer and employee base contributions, as a percentage of employee compensation, are as follows for each of the three plans for 2003, 2002 and 2001:

		2003	2002	2001
CSRS
	Employer	17.40*	7.00	7.00
	Employee	7.00	7.00	7.00
Dual CSRS
	Employer	17.40*	7.00	7.00
	Employee	0.80	0.80	0.80
FERS
	Employer	10.70	10.70	10.70
	Employee	0.80	0.80	0.80

* As of May 2003, Public Law 108-18 changed our base contribution level for the CSRS. See Note 7.

The number of employees enrolled in each of the retirement plans at the end of 2003, 2002 and 2001 is as follows:

	2003	2002	2001
CSRS	211,913	230,632	248,347
Dual CSRS	10,122	10,828	11,440
FERS	505,728	510,237	514,870

Deferred Retirement Liability — Civil Service
Retirement System

Prior to Public Law 108-18 (see Note 7), when we increased CSRS employees' current basic pay we were liable for the estimated additional deferred retirement liability. The Office of Personnel Management determined and billed us for the current portion of the increase in the estimated deferred liability of the Civil Service Retirement and Disability Fund (CSRDF) resulting from basic pay increases. We expensed as billed those amounts as they became payable in 30 equal