Postal Service Reform Act of 2022: What You Need To Know!

In this article, we discuss the Postal Service Reform Act and how this affects USPS' main purpose - to deliver the mail of each citizen within the United States!




April 21, 2022

In 2021, the USPS early retirement to non-union employees was an effort to stem billions in red ink. DeJoy said “I would suggest that we are on a death spiral,” and that the U.S. mail system is losing $10 billion a year and urgently needs reform and legislative relief. AndIn 2021, the USPS early retirement to non-union employees was an effort to stem billions in red ink. DeJoy said “I would suggest that we are on a death spiral,” and that the U.S. mail system is losing $10 billion a year and urgently needs reform and legislative relief. And in early April 2022, President Biden signed the Postal Service Reform Act of 2022 into law.  This new law’s purpose is to help the United States Postal Service (USPS) continue to provide services to the United States citizens and remove restrictions mandated by previous legislation.

Postal Service Reforms Act 2022: What’s in the Law?

Here's all you need to know about the postal reform act of 2022 that is now law.

  1. Retirement Obligations

    Two of the most impactful benefits of the 2022 Postal Service Reform Act address how retirees and their benefits are addressed.  In 2006, Congress passed, and President Bush signed into law the Postal Accountability and Enhancement Act of 2006.  Of the significant aspects of this legislation was that the USPS was required to fund in advance the health and retirement benefits of all employees for 50 years - a significant obligation that no other organization was held accountable for.  As you can imagine, this obligation carried some heavy financial burden on the organization. The Postal Service Reform Act of 2022 provides some relief from this obligation.  Another significant aspect is that future retirees will be moved to Medicare as their primary insurance when they turn 65, and the Federal Employees Health Benefits Program (FEHB) will serve as the supplemental insurance program.

    1. Transparency & Oversight

    Another key feature of the law is that the USPS is now required to maintain “a publicly available dashboard to track service performance and report regularly on its operations and financial conditions.” This portion of the legislation ensures that the post office is continuing to improve service and provide transparency for better oversight.

    It’s important to keep in mind that the USPS doesn’t receive much in terms of taxpayer funding and is self-supporting through stamps, package deliveries, and mail services, though the USPS is mandated to serve all homes in the United States.

    1. Efficient Communication Network

    The postal service is one of the oldest federal agencies.  To forge a nation, the founders needed an efficient communications network.  With the changes in obligations and a potential for additional ways to increase their revenue instituted by the Postal Service Reform Act of 2022, the United States Postal Service can focus once again on their primary function; delivering the nation’s mail!

    What does that mean for USPS retirees?

    The Postal Service Reform Act of 2022 ends the USPS pre-funding retirement mandate to pre-fund its retiree health benefit and requires current postal workers to enroll in Medicare Part B when they turn 65. 

    According to the American Postal Workers Union, about 75% of current Medicare-eligible retirees are enrolled in Parts A and B and 80% of eligible postal retirees, too. Under the postal services reform act, current USPS retirees will have a special window during which they can choose to enroll in Medicare with no penalty or continue with FEHB coverage alone. The postal bill balances the risk pools, and the Office of Personnel Management (OPM) now estimates premiums should go down for postal and non-postal employees and retirees alike. Retiree health coverage for all future postal retirees will become a combination of Medicare and FEHB.

    While people using the Postal Service might not immediately see a difference, over time the agency's financial stability will start to make a difference. USPS is trying to ensure that the postal service continues to deliver mail six days a week with a guaranteed 6-day delivery. So if you are a business owner, and want to strengthen your direct mail campaign strategy, get in touch with us. Compu-Mail has developed a strong partnership with the United States Postal Service to ensure that all business mailings are delivered in a timely and efficient manner to minimize your investment and maximize your opportunities. Contact us today to explore options to address the needs of your company.


    How early can you retire from the post office?

    The standard age for USPS retirement is 65. The USPS retirement plans are placed under both Federal Employment Retirement System (FERS) and Civil Service Retirement System (CSRS) depending on whether service life began before or after 1984. 

    What is the postal service reform act?

    The Postal Service has remained fiscally underwater due to some legislations passed decades ago. To overcome those issues and make the USPS mailing services better, the Postal Service Reform Act of 2022 came into being. Primarily, it eliminated the requirement to pre-fund retiree benefits for the next 75 years to help stabilize USPS’ finances. 

    Why did USPS pre-fund retirement?

    The USPS pre fund retirement mandate required the postal service to prefund its retiree health care benefits 75 years in advance. This USPS retirement funding was to improve the long-term financial strength and ensure a viable postal service for the future.

    What does the postal service reform act do?

    The bill was passed to place USPS on the path toward financial stability by adding much-needed transparency to the postal service by enacting prospective Medicare.

    Can I retire early from USPS?

    Yes, to qualify for post office early retirement, employees must have at least 20 years of service and be 50 years of age or older, or 25 years of service.

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