Service Credit for Retirement Annuities of USPS Employees When USPS Has Not Made Required Contributions

Service Credit for Retirement Annuities of
USPS Employees When USPS Has Not
Made Required Contributions
The Office of Personnel Management may not address the United States Postal Service’s
failure to make statutorily required retirement contributions by denying its employees
accrued service credit under the Federal Employees’ Retirement System during their
periods of qualifying federal employment.

November 1, 2011

MEMORANDUM OPINION FOR THE GENERAL COUNSEL
OFFICE OF PERSONNEL MANAGEMENT
AND
THE GENERAL COUNSEL AND EXECUTIVE VICE PRESIDENT
UNITED STATES POSTAL SERVICE

On June 22, 2011, the United States Postal Service (“USPS” or “Postal
Service”) notified the Office of Personnel Management (“OPM”) that,
because of its financial difficulties, the Postal Service, as a cash conserva-
tion measure, was suspending its employer contributions to the Civil
Service Retirement and Disability Fund (“the Fund”) on behalf of those
postal employees covered by the Federal Employees’ Retirement System
Act (“FERS”), 5 U.S.C. §§ 8401–8479 (2006 & Supp. IV 2010). In light
of that suspension, OPM requested an opinion from our Office regarding
(1) whether, and to what extent, OPM has discretion to offset the Postal
Service’s obligation to make employer retirement contributions against a
“surplus” the Postal Service asserts that it has accumulated in the Fund;
and (2) whether postal employees are entitled to receive service credit, for
purposes of determining their eligibility for retirement and calculating the
amount of their retirement annuity, for periods of employment during
which the Postal Service has not made its required employer contribu-
tions. 1 The Postal Service, an independent agency, joined OPM in the
request for an opinion and agreed to be bound by our decision. 2

1 See Memorandum for Virginia Seitz, Assistant Attorney General, Office of Legal
Counsel, from Elaine Kaplan, General Counsel, Office of Personnel Management (July
14, 2011) (“OPM Memo”). OPM enclosed with its submission an undated paper it had
received from USPS, with the heading “Effect of Suspension of Agency Contribution to

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In its submission to the Office of Legal Counsel (“OLC”), the Postal
Service indicated that, despite earlier disagreement, it now “does not
contest OPM’s position that the Postal Service is still obligated by the
statute to make its employer contribution, despite the existence of the
surplus.” USPS Memo at 14; see also id. at 4. The Postal Service, howev-
er, also specifically stated that it considers the question “whether the
[Postal Service’s] Board [of Governors] was justified in its decision to
suspend the employer contribution in order to conserve cash so as to avoid
a shutdown in mail service” to be outside “the scope of [OLC’s] review.”
Id. at 3 n.2. Thus, we do not address (i) whether OPM could offset the
Postal Service’s required contributions against any surplus it may have in
the Fund; (ii) whether the Postal Service’s apparent statutory violation
may be excused; or (iii) what other avenues of recourse OPM may have
against the Postal Service for its failure to make the statutorily required
contributions. Instead, this opinion addresses only the question whether,
under the relevant provisions of the FERS statute, postal employees are
entitled to receive service credit for periods during which the Postal
Service has not made the required employer contributions to the Fund.
The Postal Service argues that its employees should receive such credit.
Id. at 2–14. OPM disagrees, maintaining that employees cannot be credit-
ed with service for periods in which no employer contributions have been
made into the Fund. OPM Memo at 5–9. For the reasons that follow, we
agree with the Postal Service that OPM may not address the Postal Ser-
vice’s failure to make statutorily required contributions by denying its
employees accrued service credit under FERS during their periods of
qualifying federal employment.

I.

In 1986, Congress enacted the Federal Employees’ Retirement System
Act of 1986, Pub. L. No. 99-335, 100 Stat. 514 (codified as amended at

FERS on Employees” (“USPS Paper”). OPM has agreed provisionally to provide service
credit to postal employees who may retire while the issue is pending before our Office.
OPM Memo at 2.
2 See Memorandum for Virginia Seitz, Assistant Attorney General, Office of Legal

Counsel, from Mary Anne Gibbons, General Counsel and Executive Vice President,
United States Postal Service (Aug. 12, 2011) (“USPS Memo”).

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5 U.S.C. §§ 8401–8479 and scattered U.S.C. sections), a system of re-
tirement and other benefits for federal employees that will gradually
supersede the Civil Service Retirement System (“CSRS”), which has
been in effect since 1920. See Pub. L. No. 66-215, 41 Stat. 614 (1920)
(codified as amended at 5 U.S.C. §§ 8331–8351 (2006 & Supp. 2010)).
In enacting FERS, Congress set out, among other things, “to establish a
Federal employees’ retirement plan which is coordinated with title II of
the Social Security Act”; “to ensure a fully funded and financially sound
retirement benefits plan for Federal employees”; and “to assist in build-
ing a quality career work force in the Federal Government.” Pub. L. No.
99-335, § 100A(1), (2), & (5), 100 Stat. at 516 (codified at 5 U.S.C.
§ 8401 note (2006)). 3 With certain exceptions, the Act became effective
on January 1, 1987. Id. § 702, 100 Stat. at 631 (codified at 5 U.S.C.
§ 8401 note). Since then, most newly hired federal employees who are
covered by Social Security have also been covered by FERS.
FERS is a three-tiered retirement system that consists of Social Securi-
ty, a basic annuity, and a Thrift Savings Plan (“TSP”). See 5 U.S.C.
§ 8403 (2006) (except as otherwise provided, benefits payable under
FERS are in addition to benefits payable under the Social Security Act);
id. §§ 8410–8425 (2006 & Supp. IV 2010) (basic annuity); id. §§ 8431–
8440f (2006 & Supp. IV 2010) (TSP). 4 The Postal Service and its em-
ployees fall within FERS coverage. 39 U.S.C. § 1005(d) (2006 & Supp.
III 2009). The dispute between OPM and the Postal Service concerns the
basic annuity.
Under FERS, an “employee,” as defined in 5 U.S.C. § 8401(11)
(2006), must complete at least five years of creditable civilian service
under 5 U.S.C. § 8411 to be eligible for the annuity. 5 U.S.C. § 8410

3 From Congress’s enactment of the Social Security Act in 1935, Pub. L. No. 74-271,
49 Stat. 620 (1935), until 1983, federal employees were excluded from Social Security
coverage. In 1983, the Social Security Act was amended to cover newly hired federal
employees. Pub. L. No. 98-21, § 101, 97 Stat. 65, 67–70 (1983) (codified at 42 U.S.C.
§ 410). That expansion of Social Security was a major impetus behind the adoption of
FERS, the new retirement system for federal employees, in 1986. See generally S. Rep.
No. 99-166, at 1–2 (1985) (providing background on the CSRS and amendment of the
Social Security Act to cover federal employees).
4 The TSP is a tax-deferred savings plan for federal employees in which employee con-

tributions are matched in part by employer agency contributions.

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(2006). As a general matter, creditable service includes “employment as
an employee . . . after December 31, 1986.” Id. § 8411(b)(1). With cer-
tain exceptions, the annuity of a retiring employee is 1 percent of that
individual’s average pay (the highest average pay in effect over any three
consecutive years of service) multiplied by that individual’s “total [years
of] service.” Id. §§ 8415(a), 8401(3) (defining “average pay”). The
statute establishes different potential retirement ages for employees
depending on the number of years of service completed. Id. § 8412 (2006
& Supp. IV 2010). For example, an employee who is separated from
service after becoming 62 years old and completing five years of service
is entitled to an annuity. Id. § 8412(c). “[S]ervice,” in turn, “means
service which is creditable under section 8411.” Id. § 8401(26). As
these provisions make clear, the determination whether service is cred-
itable under the statute has important ramifications for an employee’s
eligibility to receive a basic annuity, the applicable retirement age, and
the calculation of the amount of the annuity. 5
The FERS basic annuity is funded through a combination of employee
deductions and employer agency contributions to the Civil Service Re-
tirement and Disability Fund. Id. §§ 8422, 8423, 8401(6) (2006 & Supp.
IV 2010). Under FERS, the employing agency is required to deduct and
withhold from each employee’s basic pay a percentage that is equal to 7
percent of basic pay (with a different percentage applicable to Members
of Congress and certain categories of employees) less the Old Age,
Survivors, and Disability Insurance (“OASDI”) tax rate in effect, which
is now 6.2 percent. Id. § 8422(a), (c) (2006 & Supp. IV 2010); 26 U.S.C.
§ 3101(a) (2006). Accordingly, the employer is required by the statute to
deduct 0.8 percent of most employees’ basic pay for contribution to the
Fund.
The employing agency’s own contribution to the Fund is much larger
and is based on the “normal-cost percentage,” which is “the entry-age
normal cost of the provisions of [FERS] which relate to the Fund,” as
computed by OPM “in accordance with generally accepted actuarial

5Creditable service is also important to other facets of the retirement system. For ex-
ample, an employee is not entitled to retain the employer’s contributions to the TSP and
earnings attributable to such contributions before completing specific periods of service.
See 5 U.S.C. § 8432(g)(2) (2006).

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practice and standards” and “expressed as a level percentage of aggregate
basic pay.” 5 U.S.C. § 8401(23) (defining “normal-cost percentage”); see
id. § 8423(a) (2006 & Supp. IV 2010). 6 Under the statute, “each employ-
ing agency having any employees or Members subject to section 8422(a)
shall contribute to the Fund an amount” that is the product of the applica-
ble normal-cost percentage and the aggregate amount of basic pay payable
by the agency for the period involved. Id. § 8423(a)(1). In determining the
normal-cost percentage to be applied, the employee deductions required
by section 8422 must be taken into account. Id. § 8423(a)(2). 7 Thus, for

6 “Entry age normal cost” is
generally understood as the percentage of every paycheck that should be invested, over
the total career of each employee in a group of new entrants, to pay fully for all bene-
fits received by that group, including all eligible survivors. Normal cost is formally de-
fined as the present value of future benefits divided by the present value of future com-
pensation. These values are expressed as a percentage of payroll, and provide a
consistent measure of relative pension costs over time.
S. Rep. No. 99-166, at 35 (1985). OPM publishes the “normal cost percentages” for
particular categories of employees in the Federal Register. At the time the Postal Service
suspended its employer contributions to the Fund, the government-wide normal cost
percentage for most employees was 12.5 percent. Federal Employees’ Retirement System;
Normal Cost Percentages, 75 Fed. Reg. 35,098 (June 21, 2010). For the first pay period
commencing on or after October 1, 2011, the normal cost percentage for most employees
rose to 12.7 percent. Federal Employees’ Retirement System; Normal Cost Percentages,
76 Fed. Reg. 32,242, 32,243 (June 3, 2011).
7 Section 8422(a) requires that “[t]he employing agency shall deduct and withhold

from basic pay of each employee . . . a percentage of basic pay.” 5 U.S.C. § 8422(a)(1).
Thus, so long as the individual is an “employee,” see id. § 8401(11), and is not otherwise
excluded from coverage under the statute, see id. § 8402 (2006), the individual is “subject
to section 8422(a),” and the employing agency is required to make contributions to the
Fund under section 8423. There is no dispute here that the Postal Service’s employees for
whom the employer contributions have been withheld are “employees” for purposes of
FERS. As a general matter, the FERS definition of “employee” refers to the definition of
“employee” for CSRS benefits under chapter 83, in 5 U.S.C. § 8331(1) (2006). Section
8331(1), in turn, defines the term by reference to 5 U.S.C. § 2105. Under section 2105(a),
an “employee” is an individual who is “appointed in the civil service” by a federal
official; “engaged in the performance of a Federal function”; and “subject to the supervi-
sion” of a federal official. 5 U.S.C. § 2105(a) (2006); see Taylor v. OPM, 82 M.S.P.R.
237, 241 (M.S.P.B. 1999). Employees of the Postal Service, who are generally covered by
the retirement statutes by virtue of 39 U.S.C. § 1005(d), must still meet the definition of
“employee” to be covered by FERS. See Taylor, 82 M.S.P.R. at 241. An “employee” for
purposes of FERS must also be covered by title II of the Social Security Act. 5 U.S.C.
§ 8401(11).

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most employees, employing agencies contribute to the Fund an amount
equal to 11.9 percent of basic pay—the aggregate normal cost of 12.7
percent minus the 0.8 percent employee deduction—which is more than
93 percent of the normal cost. OPM, which has authority to prescribe
regulations under the statute, id. § 8461(g) (2006), has construed FERS to
require the employing agency to “remit in full the total amount of normal
cost (which includes both employee deductions and Government contribu-
tions), so that payment is received by the Fund on the day of payment to
the employee of the basic pay from which the employee deductions were
made.” 5 C.F.R. § 841.504(h) (2011); see also id. § 841.413 (2011). 8

II.

The dispute between OPM and the Postal Service was precipitated by
the Postal Service’s decision, in light of its current financial crisis, to
conserve cash by suspending its employer contributions for the basic
annuity, effective June 24, 2011, for those postal employees covered by
FERS. OPM Memo at 1; USPS Memo at 2. The Postal Service is continu-
ing to withhold employee deductions from basic pay; it also continues to
make its automatic and matching contributions to the TSP accounts of
FERS employees and to remit those contributions, along with employee
TSP contributions. USPS Memo at 2. OPM does not dispute that the
Postal Service and its employees continue to satisfy all the requirements
of the statute except the agency’s obligation to make employer contribu-
tions to the Fund for the basic annuity. The question we must address is

8 FERS further requires OPM to compute the amount of the “supplemental liability” of

the Fund as of the close of each fiscal year, both with respect to current or former em-
ployees of the Postal Service and other individuals. 5 U.S.C. § 8423(b)(1). The “supple-
mental liability” is the estimated excess of the actuarial present value of all future benefits
payable from the Fund based on the service of current or former employees or Members
of Congress over the sum of the actuarial present value of employee deductions, employer
contributions, and the Fund balance. Id. § 8401(27). The amount of any supplemental
liability must be amortized in 30 equal annual installments, with interest. Id. § 8423(b)(2).
At the end of each fiscal year, OPM must notify the Postmaster General of the amount of
the required installment computed with respect to current or former postal employees and
the Secretary of the Treasury of the amount computed with respect to other individuals.
Id. § 8423(b)(3). Upon receiving such notifications, the Postal Service is required to pay,
and the Secretary of the Treasury is required to credit, to the Fund the amounts specified.
Id. § 8423(b)(4).

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thus narrow: whether postal employees are entitled to service credit for
retirement purposes for the periods in which the Postal Service has sus-
pended its employer contributions under 5 U.S.C. § 8423, but in all other
respects has complied with the FERS statute.
OPM states that its “longstanding interpretation of the statute,” as codi-
fied in its regulations, provides that “in order for an employee to be cov-
ered under FERS, an agency must make the periodic contributions to the
Retirement Fund that are required by law.” OPM Memo at 2. OPM does
not claim that FERS expressly provides that employer contributions are a
necessary precondition for employee coverage or that employees shall not
receive service credit for periods in which their employing agencies fail to
make employer contributions. Instead, OPM points out that section 8423
of FERS mandates that USPS must make contributions to the Fund on
behalf of employees covered by FERS. See 5 U.S.C. § 8423(a)(1) (“[e]ach
employing agency having any employees . . . subject to section 8422(a)
shall contribute to the Fund” an amount that is based on the normal-cost
percentage set by OPM) (emphasis added)). And while section 8423 does
not expressly make the mandatory employer contributions a precondition
to employee eligibility, in OPM’s view, the relevant OPM regulation
does:
To be covered under FERS, an individual must:
(a) Be an employee, Member, or specifically covered by another
provision of law;
(b) Be covered by social security;
(c) Have retirement deductions withheld from pay and have agen-
cy contributions made; and
(d) Be paid based on units of time.
Except as provided in § 842.104 and as excluded by § 842.105, an
employee or Member is covered by FERS.
5 C.F.R. § 842.103 (2011) (emphasis added); see also id. § 842.304(a)
(2011) (providing, with exceptions not relevant here, that “an employee
. . . is entitled to credit for all purposes under FERS for a period of civil-
ian service with the Government or the U.S. Postal Service—[p]erformed
after December 31, 1986, which is covered service under subpart A of this
part,” a reference back to section 842.103) (emphasis added).

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As OPM explains, section 842.103 “merges the various statutory re-
quirements applicable to FERS into one regulatory provision that deter-
mines whether an individual is covered by FERS.” OPM Memo at 5.
OPM’s basic claim is thus that, “while there is no single provision in the
statute which states that each of these requirements is essential to ‘cover-
age,’ when read as a whole, it was clearly reasonable for OPM to make
coverage dependent upon compliance with all of the statutory require-
ments.” Id. at 6. In OPM’s view, section 842.103 makes “clear” that “to
be ‘covered by FERS’ an individual must not only have deductions with-
held from their pay—their employing agency must make the necessary
contributions” as well. Id. at 5–6.
On its face, section 842.103 is not as free from ambiguity as OPM sug-
gests. In particular, the last sentence in the provision states that “[e]xcept
as provided in § 842.104 and as excluded by § 842.105, an employee or
Member is covered by FERS,” 5 C.F.R. § 842.103, language that appears
to define coverage under FERS without making employer contributions a
prerequisite. We do not think that the ambiguity in this language can be
resolved by examining OPM’s practice because there does not appear to
be any relevant practice: OPM has pointed us to no instance of an agency
refusing to remit the contributions it is statutorily required to pay under
CSRS or FERS. Cf. OPM Memo at 9 (stating that no agency has failed to
make employer contributions under CSRS). Nonetheless, we assume that
OPM’s interpretation of its own regulation is entitled to deference, and
thus that section 842.103 has the meaning OPM suggests. See Talk Am.,
Inc. v. Mich. Bell Tel. Co., 131 S. Ct. 2254, 2261 (2011).
In addition to relying on the statutory text and its regulation, OPM also
finds support for its view in Congress’s purpose. OPM notes that “Con-
gress created FERS as a fully funded pension system,” intending that “the
Fund would be placed on a firm financial footing by requiring agencies to
pay the full ‘normal costs’ for FERS employees.” OPM Memo at 6. In
light of Congress’s “‘interest in sound fiscal and accounting manage-
ment,’” id. at 7 (quoting S. Rep. No. 99-166, at 29 (1985)), OPM contends
that it is “highly unlikely that Congress would have provided that em-
ployees would be considered ‘covered’ by FERS and credited for their
service if their employing agencies did not make the requisite contribution
to the Fund.” Id.

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The Postal Service, for its part, does not deny that FERS requires it to
make its employer contributions, USPS Memo at 4, 14, or that Congress
intended that FERS be placed on a sound financial footing, id. But it
points out that Congress chose to further this goal by requiring all em-
ployers to contribute to the Fund, not by depriving employees of service
credit in the highly unusual situation in which an agency fails to make its
required payments. Id. at 2–3. The Postal Service contends that under the
statute, “creditable service is generated so long as employees are perform-
ing the required service for the Federal government and are contributing
the required amounts to their pension, without regard to whether the
employing agency cannot or does not make its employer contribution.” Id.
at 2. None of the key statutory provisions, in the Postal Service’s view,
“indicate[s] that creditable service under FERS is dependent on the em-
ployer contribution.” Id. at 6. The Postal Service emphasizes that in
enacting the basic annuity, Congress “intended to provide clearly defined
and reliable benefits to employees”—a purpose that would be “vitiated by
OPM’s interpretation, which would predicate the level of employee bene-
fits on the funding decisions of agency officials.” Id. at 3; see also id. at
12. Accordingly, the Postal Service argues that OPM’s interpretation of
FERS, as embodied in its regulations, is at odds with the statute or, at
least, unreasonable, id. at 5, and that OPM cannot enforce the Postal
Service’s statutory obligation to contribute by denying service credit to its
employees.
We assume that OPM’s authority to implement FERS by regulation,
5 U.S.C. § 8461(g), would entitle it, in appropriate circumstances, to
deference in its construction of FERS pursuant to Chevron, U.S.A., Inc. v.
Natural Res. Defense Council, Inc., 467 U.S. 837 (1984). However,
OPM’s construction of the statute is entitled to deference only “if the
statute is silent or ambiguous with respect to the specific issue” at hand.
Id. at 843. If, on the other hand, “Congress has directly spoken to the
precise question at issue,” and in so doing made its intent clear, “that is
the end of the matter.” Id. at 842. And here, for the reasons set forth
below, we conclude that FERS makes clear that postal employees who
otherwise qualify for retirement benefits under FERS are both covered by
and accrue service credit under the statute notwithstanding the Postal
Service’s failure to make its employer contributions pursuant to 5 U.S.C.
§ 8423. Thus, OPM’s interpretation of FERS—that OPM can address the

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Postal Service’s failure to remit the required contributions by depriving
employees of accrued service credit—is foreclosed by the statute.

III.

A.

“We begin with the text of the statute.” Kasten v. Saint-Gobain Per-
formance Plastics Corp., 131 S. Ct. 1325, 1331 (2011). Section 8410 of
FERS, which governs eligibility, provides: “Notwithstanding any other
provision of this chapter, an employee or Member must complete at least
5 years of civilian service creditable under section 8411 in order to be
eligible for an annuity under this subchapter.” 5 U.S.C. § 8410. Central to
resolving this controversy is section 8411, which governs creditable
service. It provides that “[t]he total service of an employee . . . is the full
years and twelfth parts thereof, excluding from the aggregate the fraction-
al part of a month, if any.” Id. § 8411(a)(1). Section 8411 further speci-
fies, in relevant part, that for purposes of FERS, “creditable service of an
employee . . . includes . . . employment as an employee . . . after Decem-
ber 31, 1986.” Id. § 8411(b), (b)(1). These provisions are not vague or
unclear. They indicate plainly the category of employees who are eligible
for FERS benefits, and Congress’s broad, but not unbounded, definition
of “creditable service” for FERS purposes.
Section 8401(11) excludes certain categories of individuals from the
definition of “employee,” and section 8402 excludes certain categories of
individuals from coverage under FERS. Id. §§ 8401(11), 8402. But these
exclusions are irrelevant to the present dispute. As USPS points out, OPM
does not argue that “the non-payment of the employer contribution means
that Postal Service employees are no longer ‘employees’ under the FERS
statute or that they now fall within one of the exceptions in 5 U.S.C.
§ 8402 by virtue of such non-payment.” USPS Memo at 6. And the postal
employees potentially affected by their employer’s non-payment of its
contributions are still engaged in “employment.” The plain language of
FERS, then, supports the view that employees earn creditable service so
long as they are employed as “employee[s]” after December 31, 1986,
5 U.S.C. § 8411(b)(1), regardless of whether their employer has suspend-
ed its contributions to the Fund.

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To be sure, as noted earlier, OPM acknowledges that FERS’s definition
of “creditable service” does not mention employer contributions. Its
argument is that a correct determination of what counts as “creditable
service” under FERS does not depend on the wording of section
8411(b)(1) alone, but also on the overall statutory plan—in particular, on
the fact that another provision of FERS clearly requires employer contri-
butions as part of the overall FERS scheme.
We agree that section 8423 of FERS requires employers to make con-
tributions to the Fund. We further agree that “[i]nterpretation of a word or
phrase depends upon reading the whole statutory text, considering the
purpose and context of the statute.” Dolan v. U.S. Postal Serv., 546 U.S.
481, 486 (2006). However, the mere fact that employer contributions are a
mandatory part of the overall FERS scheme does not indicate that OPM is
authorized to suspend or eliminate the accrual of employees’ service
credit as a remedy for an employer’s failure to make such contributions.
Cf. Harris Trust & Sav. Bank v. Salomon Smith Barney Inc., 530 U.S.
238, 247 (2000) (ERISA’s “‘comprehensive and reticulated’ scheme
warrants a cautious approach to inferring remedies not expressly author-
ized by the text” (citations and internal quotation marks omitted)). As
noted above, the specific statutory provision that addresses creditable
service says nothing that suggests that an employee’s accrual of credit
depends on the fact or extent of employer contributions. Section 8423 of
FERS likewise fails to mandate, or even suggest, that a lapse in an em-
ploying agency’s contributions should result in a denial of service credit
to that agency’s employees.
Certainly, as OPM states, section 8423 reflects Congress’s goal that
“the Fund . . . be placed on a firm financial footing by requiring agencies
to pay the full ‘normal costs’ for FERS employees.” OPM Memo at 6. But
it does so not by stipulating that employees will earn service credit (and
therefore future benefits) only if their employers make all required contri-
butions, but rather by imposing on agency employers a legal obligation to
make the required contributions. OPM itself has suggested no reason to
think that in practice this statutory mechanism has proven ineffective in
serving Congress’s goal. Cf. OPM Memo at 9 (“no agency has ever de-
faulted on its obligation to make the required contributions” under CSRS).

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Moreover, the text of the FERS statute suggests that Congress consid-
ered the question of statutory mechanisms to address funding shortfalls
and enacted a mechanism to deal with one kind of shortfall, without
indicating that the suspension of employee service credit might be used as
a solution to that or any other funding deficiency. Specifically, the statute
provides that, in the event that OPM determines, on an annual review, that
an agency’s employer contributions do not in fact satisfy the statute’s
funding goals, OPM must notify the Postmaster General (or the Secretary
of the Treasury, as applicable) of any “supplemental liability” and the
amount of the required installment payments, amortized over 30 years.
5 U.S.C. § 8423(b); see supra note 8. The Postal Service must then pay
the amount specified in the notification to address the funding shortfall.
5 U.S.C. § 8423(b)(4)(B). The existence of this supplemental liability
process does not affirmatively authorize the Postal Service to avoid mak-
ing its employer contributions as they come due in favor of amortizing
such payments over 30 years. But the existence of a supplemental liability
remedy for at least one type of funding shortfall shows that Congress was
aware of the possibility that the employer contributions remitted under
section 8423 might in some circumstances fail to result in agency funding
of the full costs of employee benefits. Congress chose nonetheless to
provide expressly for only one response to such a possibility. In light of
that awareness, the omission of any other mechanism for addressing this
or other kinds of shortfalls, such as denying service credit to employees
when their employer defaults on its contributions, suggests that “the
statute fails to mention [other responses] ‘by deliberate choice, not inad-
vertence.’” Bruesewitz v. Wyeth LLC, 131 S. Ct. 1068, 1076 (2011) (cita-
tion omitted).
In sum, none of the most clearly relevant provisions of the statute sug-
gests that either employee eligibility or creditable service under FERS
depends upon the extent of the employer’s contributions to the Fund. As
OPM insists, and the Postal Service effectively concedes, the plain lan-
guage of FERS’s key provisions specifies that agency employers must
contribute to the Fund the normal cost of their covered employees’ basic
pay. At the same time, these provisions fail to link an agency’s failure to
comply with this requirement to the affected employees’ eligibility for an
annuity or accrual of creditable service. Instead, they appear on their face
to provide that an employee is entitled to service credit so long as he or

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she is employed as an “employee” after December 31, 1986. See 5 U.S.C.
§ 8411(a) & (b). Given the harsh penalty federal employees would suffer
if they were denied FERS coverage or service credit for periods of em-
ployment during which their agency employers failed to make the re-
quired contributions to the Fund—an action over which the employees
have no control—the absence of any reference in FERS’s key provisions
to OPM’s authority to impose that particular remedy for an agency’s
noncompliance strongly suggests that Congress did not intend such au-
thority to exist. As we discuss next, we do not think any of OPM’s addi-
tional arguments in support of this authority are persuasive.

B.

OPM offers several other arguments that, in its view, show that the
FERS statute requires employer contributions as a condition of employ-
ees’ coverage and accrual of creditable service under FERS. First, OPM
relies heavily on the Postal Service’s concession that, to receive service
credit under FERS, an employee must have deductions withheld from his
or her wages, even though, in the Postal Service’s view, the employing
agency’s contributions are not required for that purpose. OPM Memo at 7;
see USPS Memo at 5–10. OPM insists that these two propositions cannot
be reconciled because it is illogical to distinguish between the employee’s
deduction and the employer’s contribution—both of which are statutorily
required and neither of which is expressly linked by the statutory text to
accrual of service credit—for purposes of determining whether an em-
ployee accrues creditable service for periods when employee deductions
or employer contributions have not been made. OPM Memo at 7.
We need not resolve this issue. As a practical matter, the Postal Service
has continued to withhold from its employees’ basic pay the deductions
required under 5 U.S.C. § 8422—including the employee deductions—
and to deposit the deductions into the Fund. USPS Memo at 2. If fulfill-
ment of the Postal Service’s obligations under section 8422 is a necessary
condition to postal employees receiving credit under FERS, that condition
is being met. Furthermore, although OPM and the Postal Service agree
that a failure to make these employee deductions would affect employees’
ability to earn creditable service, we are unsure that they are correct. In
our view, this issue is difficult, particularly in the context of a scheme in

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which it is the agency’s legal obligation to effectuate the employee deduc-
tion. See 5 U.S.C. § 8422(a). In fact, the answer to the question may well
depend on the reason that employee deductions have not been made. 9 In
any event, even if employee deductions constitute a prerequisite to the
accrual of service credit under FERS—one that does not appear in the
FERS eligibility or accrual provisions themselves—that would not neces-
sarily mean that employer contributions likewise would be a prerequisite
for the accrual of such credit, because the significance and treatment of
employee deductions and employer contributions within the statutory
scheme are different. Each argument for linking employee service credit
to separate requirements in the statute would have to be considered on its
own terms.
Both OPM and the Postal Service cite different subsections of section
8411—some requiring employee deductions as a condition of receiving
creditable service and a couple requiring employee deductions and em-

9 For example, if the employer failed to make the employee deduction because the af-
fected employee was not subject to deductions under 5 U.S.C. § 8422, the employee’s
eligibility for coverage and ability to accrue creditable service under FERS might be
implicated. Cf. Tomboc v. OPM, 355 Fed. Appx. 422, 424 (Fed. Cir. 2009) (noting that
“[w]hile the absence of deductions” under the CSRA “is an indication” regarding whether
a position is covered, “it is not necessarily dispositive”). Alternatively, if the employer
failed to make the employee deductions because of an agency error, the error may be
corrected, see 5 C.F.R. § 841.505 (2011); and, in any event, an agency error would not
necessarily affect the employee’s entitlement to coverage. Cf. Noveloso v. OPM, 45
M.S.P.R. 321, 324 n.2 (M.S.P.B. 1990) (noting, in addressing CSRS coverage, that “[i]f
no deductions were withheld because of agency error, or because it was not determined
until after the fact that such service should have been covered, the employment will still
constitute covered service”); accord Staffney v. OPM, 54 M.S.P.R. 99, 102–03 (M.S.P.B.
1992) (same, under CSRS coverage); In re Kaltakji, 1 M.S.P.R. 63, 64 (M.S.P.B. 1978)
(same). But see 5 U.S.C. § 8339(i) (2006) (providing, for purposes of computing a CSRS
annuity, that the total service of an employee “shall not include any period of civilian
service . . . for which retirement deductions or deposits [under section 8334] have not
been made” unless the employee makes a deposit under section 8334(c) or (d)(1) or no
deposit is required for such service as specified under section 8334(g) or another statute).
And, for the same reasons that an agency error may not affect the employee’s entitlement
to coverage, a willful agency refusal to make the required employee deductions likewise
may not affect that entitlement. For the reasons stated in the text, however, we need not
decide the circumstances, if any, in which an employing agency’s failure to make the
employee deductions and deposit them into the Fund would affect an employee’s cover-
age and accrual of service under FERS.

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ployer contributions—to support their respective positions. On the one
hand, OPM contends that, where Congress intended to permit service
credit to be afforded even if no contributions were made by the agency, it
did so explicitly. It cites as an example section 8411(b)(3), which permits
employees to receive service credit for periods of employment during
which no employing agency contributions or employee deductions were
paid into the Fund for certain service performed prior to January 1, 1989.
OPM Memo at 8 n.5. In such instances, the employee must make a deposit
into the Fund of 1.3 percent of his or her basic pay, with interest, for that
period of service. Id. (citing 5 U.S.C. § 8411(f)(2)). 10 However, no em-
ploying agency contribution is required for that period. Id. 11 The Postal

10 Section 8411(b)(3), with the introductory language in section 8411(b), provides:
For the purpose of this chapter, creditable service of an employee or Member in-
cludes[,] except as provided in subsection (f) or (h), any civilian service (per-
formed before January 1, 1989, other than any service under paragraph (1) or (2))
which, but for the amendments made by subsections (a)(4) and (b) of section 202
of the Federal Employees’ Retirement System Act of 1986, would be creditable
under subchapter III of chapter 83 of this title (determined without regard to any
deposit or redeposit requirement under such subchapter, any requirement that the
individual become subject to such subchapter after performing the service in-
volved, or any requirement that the individual give notice in writing to the offi-
cial by whom such individual is paid of such individual’s desire to become sub-
ject to such subchapter)[.]
5 U.S.C. § 8411(b), (b)(3). Section 8411(f)(2) prohibits an employee from receiving
“credit under this chapter for any service described in subsection (b)(3) for which retire-
ment deductions under subchapter III of chapter 83 have not been made, unless such
employee or Member deposits an amount equal to 1.3 percent of basic pay for such
service, with interest.” Id. § 8411(f)(2). Section 8411(f)(1) requires an employee who has
received a refund of CSRS retirement deductions for service described in subsections
(b)(2) or (b)(3) to “deposit[] an amount equal to 1.3 percent of basic pay for such service,
with interest,” as a condition of receiving credit for such service. Id. § 8411(f)(1).
The Senate Committee on Governmental Affairs released a Committee Print in Octo-
ber 1986, four months after the enactment of FERS, that set out a detailed section-by-
section analysis of the statute. The committee print explains that section 8411(b)(3)
“provides that creditable service includes . . . service before January 1, 1989, which was
either non-covered or was not vested under CSRS in which case a contribution must be
made under subsection (f).” S. Comm. on Governmental Affairs, 99th Cong., Supple-
mental Information Regarding the Federal Employees’ Retirement System Act of 1986,
at 7 (Comm. Print 1986) (“FERS Comm. Print”).
11 Section 8411(b)(3) is not unique in requiring employees who had not contributed to

the Fund (sometimes because they had been covered by other retirement systems) but who

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Service, on the other hand, cites two instances in which the statute ex-
pressly requires the payment of an employer contribution to render certain
service creditable, arguing that there would have been no reason for
Congress to have explicitly required an employer contribution if accrual
of service credit is invariably conditioned on an agency’s having made
employer contributions to the Fund. USPS Memo at 8 (citing 5 U.S.C.
§ 8411(e), (g) (the latter of these added in subsequent amendments to
FERS)). 12

seek service credit within the FERS system, to make payments to the Fund equal to the
amounts that would have been deducted as FERS employee contributions for that period
of service—without any mention of the necessity of an employer contribution. See, e.g.,
5 U.S.C. § 8411(b)(4) & (5) (the latter of these added in subsequent amendments to
FERS); USPS Paper at 6. In still other instances, Congress treated service for which
deductions were not paid to the Fund as creditable with no requirement of any kind of
employee or employer deposit. See 5 U.S.C. § 8411(c)(1)(A) (military service performed
before January 1, 1957); id. § 8411(d) (certain periods of leave without pay); USPS Paper
at 7.
12 Section 8411(e) provides:

Credit shall be allowed for periods of approved leave without pay granted an employee
to serve as a full-time officer or employee of an organization composed primarily of
employees . . . , subject to the employee arranging to pay, through the employee’s em-
ploying agency, within 60 days after commencement of such leave without pay,
amounts equal to the retirement deductions and agency contributions which would be
applicable under sections 8422(a) and 8423(a), respectively, if the employee were in
pay status. If the election and all payments provided by this subsection are not made,
the employee may not receive credit for the periods of leave without pay, notwith-
standing the third sentence of subsection (d).
5 U.S.C. § 8411(e) (emphasis added). Section 8411(g), in turn, provides that “[a]ny
employee who—
“(1) served in a position in which the employee was excluded from coverage un-
der this subchapter because the employee was covered under a retirement system
established under section 10 of the Federal Reserve Act; and
“(2) transferred without a break in service to a position to which the employee
was appointed by the President, with the advice and consent of the Senate, and in
which position the employee is subject to this subchapter,
“shall be treated for all purposes of this subchapter as if any service that would have been
creditable under the retirement system established under section 10 of the Federal Reserve
Act was service performed while subject to this subchapter if any employee and employer
deductions, contributions or rights with respect to the employee’s service are transferred
from such retirement system to the Fund.” Id. § 8411(g) (emphasis added).

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None of these examples, in our view, supports either inference. As the
Postal Service observes, section 8411 sets forth a variety of rules regard-
ing when certain types of service that fall outside the scope of section
8411(b)(1) (the service at issue here) nonetheless may be credited for
FERS purposes. Id. Congress’s varying responses to divergent coverage
and employee deduction scenarios do not shed light on what it intended as
a general matter for employees otherwise covered by FERS. With respect
to section 8411(b)(3), for example, Congress’s decision to allow the
accrual of service credit for employees in a transitional period during the
early implementation of FERS and to address the absence of retirement
deductions by requiring that the employee deposit an amount compensat-
ing for those missing employee deductions, 5 U.S.C. § 8411(f)(2), sug-
gests, at most, that Congress viewed employee deductions as more signif-
icant to coverage requirements than employer contributions. By the same
token, that Congress required employer contributions to be made as a
condition of receiving service credit in the examples cited by the Postal
Service, id. § 8411(e), (g), shows little more than that Congress chose to
impose that additional requirement in those instances and explicitly pro-
vided for employer contributions to make the requirement clear. 13

13 For similar reasons, we do not find Congress’s treatment of reemployed annuitants
in 5 U.S.C. § 8468, on which the Postal Service relies, see USPS Memo at 6–7, particular-
ly illuminating. In language added to that section after the enactment of FERS, the statute
provides that, with certain exceptions, if the annuitant becomes reemployed, “deductions
for the Fund shall be withheld from the annuitant’s pay under section 8422(a) and contri-
butions under section 8423 shall be made.” 5 U.S.C. § 8468(a) (2006). The Postal Service
makes much of the fact that a subsequent subsection provides that if an annuitant “subject
to deductions under the second sentence of subsection (a)” serves for at least 5 years, the
annuitant may elect to have his or her rights redetermined under FERS. Id.
§ 8468(b)(2)(A) (emphasis added). The Postal Service finds it significant that this subsec-
tion mentions “deductions” and not employer “contributions.” But an employee subject to
“deductions” under the second sentence of section 8468(a) would also be subject to
“contributions,” and so there was no need for Congress to repeat the full phrase in section
8468(b)(2)(A) to indicate the employees to whom it was referring. Moreover, contrary to
the Postal Service’s assertion that Congress made clear that reemployed annuitants earn
service credit “so long as ‘deductions’ are being made from their basic pay,” USPS Memo
at 7, Congress merely referred to reemployed annuitants who were “subject to deduc-
tions,” without regard to whether the deductions were actually “being made.” See
5 U.S.C. § 8468(b)(2)(A). More importantly, however, we believe again that Congress’s
policy determination about the coverage of reemployed annuitants tells us little about

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What these examples reveal is that, even where there was no other stat-
utory commitment to treat service as creditable under FERS or where
employees were covered under other federal retirement systems, Congress
sometimes extended FERS service credit in exchange for the payment of
specified employee deductions—or the payment of employer contribu-
tions, or the relinquishment of service credit under other retirement sys-
tems, or without imposing any conditions—to serve some other policy
goal, such as increased portability of retirement benefits. See Pub. L. No.
99-335, § 100A(3), 100 Stat. at 516 (codified at 5 U.S.C. § 8401 note)
(one purpose of FERS was “to enhance portability of retirement assets
earned as an employee of the Federal Government”). In our view, the
discrete scenarios addressed in section 8411 provide little assistance, one
way or another, in the assessment whether Congress intended to authorize
OPM to deny service credit to employees otherwise subject to the FERS
retirement plan for periods of employment under that plan if agencies
violated the statutory requirement that they make employer contributions
to the Fund.
Finally, as noted above, OPM argues that, in light of Congress’s crea-
tion of FERS as a “fully funded pension system,” OPM Memo at 6, and
its purpose to ensure “sound fiscal and accounting management,” id. at 7
(citing S. Rep. No. 99-166, at 29), “it is highly unlikely that Congress
would have provided that employees be considered ‘covered’ by FERS
and credited for their service if their employing agencies did not make the
requisite contribution[s] to the Fund.” Id. But, of course, Congress did
require employing agencies to make specified contributions to the Fund,
and the Postal Service is legally obligated to do so. See supra pp. 184–
186, 191. The question here is only whether Congress intended that the
remedy for the Postal Service’s failure to meet its obligations would be to
deny employees the service credit that the statute contemplates they will
earn.
We agree with OPM that Congress was concerned with the fiscal man-
agement of the Fund. But “ensur[ing] a fully funded and financially sound
retirement benefits plan for Federal employees,” Pub. L. No. 99-335,
§ 100A(2), 100 Stat. at 516 (codified at 5 U.S.C. § 8401 note), was only

whether Congress intended generally to condition coverage and accrual of service credit
for FERS employees on the agency’s deposit of its employer contributions into the Fund.

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one of several congressional purposes in enacting FERS. Among other
things, Congress also enacted FERS to establish a new retirement plan “to
assist in building a quality career work force in the Federal Government.”
Id. § 100A(5). That goal could well be subverted if Congress were to
create a retirement system in which employees’ retirement benefits could
be diminished or stripped away by their agencies’ failure to pay the statu-
torily required contributions into the Fund. Even recognizing that a fully
funded pension system was an important congressional objective, “no
legislation pursues its purposes at all costs. Deciding what competing
values will or will not be sacrificed to the achievement of a particular
object is the very essence of legislative choice—and it frustrates rather
than effectuates legislative intent simplistically to assume that whatever
furthers the statute’s primary objective must be the law.” Rodriguez v.
United States, 480 U.S. 522, 525–26 (1987).
Further, although we do not “resort to legislative history to cloud a
statutory text that is clear,” Ratzlaf v. United States, 510 U.S. 135, 147–48
(1994), we believe that, to the extent that the legislative history of FERS
is illuminating, it undermines, rather than supports, the view that Con-
gress intended to deny employees eligibility and creditable service under
FERS for periods of employment in which their employing agencies fail
to make their required employer contributions to the Fund.
The legislative history makes clear that Congress intended the basic
annuity in FERS to operate as a defined benefit plan. See, e.g., S. Rep.
No. 99-166, at 6, 9, 30, 42; FERS Comm. Print at 7. Such a plan consists
of “a general pool of assets” out of which an employee, “upon retirement,
is entitled to a fixed periodic payment.” Hughes Aircraft Co. v. Jacobson,
525 U.S. 432, 439 (1999) (citation omitted). “A defined benefit plan
promises a participant a specific amount of pension benefits at retirement
determined under a formula based on years of participation in the plan,
and in most nonbargained plans, based on an average of compensation.”
Stephen R. Bruce, Pension Claims: Rights and Obligations 17–18 (1988)
(“Bruce”); see also James E. Burk, Pension Plan Management Manual:
Administration and Investment ¶ 1.01[8], at 1-8 (1987) (“Burk”) (benefits
in a defined benefits plan determined “by a formula that is generally
related to service and compensation”); H.R. Comm. on Post Office and
Civil Serv., 98th Cong., Designating a Retirement System for Federal
Workers Covered by Social Security 6 (Comm. Print 1984) (prepared by
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the Congressional Research Service) (“CRS Comm. Print”) (“A defined
benefit plan determines benefit amount by a formula. Upon reaching the
terms specified in the definition of eligibility (usually a combination of
age and years of service), the worker receives the benefit computed from
the application of the formula to the employee’s years of service and
salary.”). 14
The FERS basic annuity follows this model. FERS promises partici-
pants a specific level of benefits by application of a formula that is gen-
erally dependent on the employee’s average pay and total service,
5 U.S.C. § 8415(a), and that bases the employing agencies’ contributions
on the “normal-cost percentage” of benefits, id. § 8423(a), which is
actuarially computed by OPM. Id. § 8401(23); cf. Burk ¶ 2.01, at 2-4
(employer’s contribution in a defined benefit plan is actuarially comput-
ed). The benefit formula in a defined benefit plan “is geared to providing
a specific retirement benefit rather than based on the rate of contributions
made by the employer to the pension fund.” Burk ¶ 2.01, at 2-5. A pen-
sion plan covered by the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. §§ 1001–1461 (2006 & Supp. III 2009), for
example, “is liable for benefits without regard to whether the employer
has made required contributions.” ABA Section of Labor and Employ-
ment Law, Employment Benefits Law 279 (1991). Thus, it was well
established by the time Congress enacted FERS, see USPS Memo at 9,
that a multiemployer pension plan covered by ERISA, which is analo-
gous in many respects to the multi-agency approach of FERS, must
award credit based on the service performed for a participating employer
regardless of whether the employer made the required contributions for
such service. As the Supreme Court recognized a year before the enact-
ment of FERS:

14 By contrast, under a “defined contribution plan,” the promise is that “certain contri-
butions will be made and credited to an employee’s individual account. Contribution rates
are fixed, usually as a percentage of the employee’s earnings. Such plans do not guarantee
an employee any fixed level of benefits at retirement. An employee’s benefit will vary,
depending on the amount of the contributions and the interest and capital appreciation
accumulated on them.” Burk ¶ 1.02[8], at 1-8 –1-9; see also Hughes, 525 U.S. at 439;
Bruce at 18. “Under defined contribution plans, employers know exactly what the pension
obligation is and the benefits are fully funded at the time of the contribution. Employees
bear the risk of variable market performance[.]” CRS Comm. Print at 6–7.

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The consistent view of the Secretary of Labor is that, under ERISA’s
minimum participation, vesting, and benefit accrual standards for
pension plans . . . a pension plan covered by ERISA must award
credit “solely on the basis of service performed for a participating
employer, regardless [of] whether that employer is required to con-
tribute for such service or has made or defaulted on his required con-
tributions.” In the Secretary’s judgment, “[a]ny plan term or Trus-
tees’ resolution to the contrary is . . . unlawful and unenforceable.”
Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472
U.S. 559, 567 n.7 (1985) (citations omitted). 15
Given this backdrop, it would be reasonable to expect some indication
in the text of FERS, or at least in its legislative history, if Congress had
intended to depart from these principles and make accrual of employee

15 Accord Cent. States, Se. & Sw. Areas Pension Fund v. Gerber Truck Serv., Inc.,

870 F.2d 1148, 1151 (7th Cir. 1988) (“Multi-employer plans are defined-contribution in,
defined-benefits out. Once they promise a level of benefits to employees, they must pay
even if the contributions they expected to receive do not materialize[.]”); Bruce at 135–
36 (“[H]ours of service for use in determining [years of work] are determined solely on
the basis of hours of work, or hours for which payment is due the employee from the
employer, without reference to the delinquency or nondelinquency of the employer’s
contributions to the [multiemployer] plan.”). As the Supreme Court noted, the longstand-
ing position of the Secretary of Labor at the time of the enactment of FERS was that
ERISA required that credit for hours worked “must be given solely on the basis of
service performed for a participating employer, regardless whether that employer is
required to contribute for such service or has made or defaulted on his required contribu-
tions. Any plan term or Trustees resolution to the contrary is, in our judgment, unlawful
and unenforceable.” Dep’t of Labor Advisory Op. No. 76–89 (Aug. 31, 1976); accord
Dep’t of Labor Advisory Op. No. 78-28A (Dec. 5, 1978); Dep’t of Labor Advisory Op.
78-21A (Oct. 16, 1978); Dep’t of Labor Advisory Op. No. 78-20A (Oct. 6, 1978); see
also Rules and Regulations for Minimum Standards for Employee Pension Benefit Plans,
41 Fed. Reg. 56,462, 56,464 (Dec. 28, 1976) (explaining, with respect to 29 C.F.R.
§ 2530.200b-2, regarding accrual of hours of service, that employee hours “must be
credited to an employee regardless of whether contributions are required to be made to
the plan on account of such hours or whether such contributions, even though required,
have not in fact been made”). Before the passage of FERS, the IRS had also issued a
Revenue Ruling explaining that a multiemployer plan that did not credit all years of
service because of an employer’s failure to make the required contributions failed to
meet the requirements of “a qualified pension plan” that it provide “definitely determi-
nable benefits” to its employees and violated the minimum participation and vesting
standards of the Internal Revenue Code. Rev. Ruling 85-130, 1985-2 C.B. 137.

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benefits contingent on employer contributions. Instead, the legislative
history underlines that Congress intended to establish a new retirement
plan for federal employees that would “provid[e] employees with finan-
cial security through a retirement program that compares favorably with
those found in the private sector.” S. Rep. No. 99-166, at 38. 16 It is unlike-
ly, in light of this goal, that Congress would have incorporated into FERS
an arrangement that would have been unlawful in the private sector with-
out saying so.
Finally, OPM argues that construing FERS to give employees an enti-
tlement to service credit without the employer’s contribution “would be
inconsistent with the Director’s fiduciary responsibilities to the Fund.”
OPM Memo at 7. But, as set forth above, OPM is obligated under the
statute to award service credit to employees who satisfy the statutory
conditions set forth, see supra Part III.A, and to “pay all benefits that are
payable under subchapter II, IV, V, or VI of this chapter from the Fund.”
5 U.S.C. § 8461(a). As we read the statute, OPM is required to pay those
benefits without regard to whether the employing agency—here, the
Postal Service—has made its employer contributions to the Fund. The
Director’s fiduciary obligations thus include awarding service credit and
paying benefits in accordance with the statute, and he would not violate
those obligations by doing so.

16 See also, e.g., 132 Cong. Rec. 11,912 (1986) (statement of Rep. Myers) (conference

report includes “many of the concepts that a great many of the better private retirement
programs have”); id. at 11,909 (1986) (statement of Rep. Ford) (Congress had an oppor-
tunity “to create a new pension system with the best features found in the private sector”);
id. at 11,304 (1986) (statement of Sen. Gore) (“The retirement system which we have
developed employs a three-tier design that combines Social Security with a defined
benefit tier that focuses on providing a reliable base pension benefit[.]”); id. at 11,303
(1986) (statement of Sen. Glenn) (FERS “provides Government employees with a three-
part program which is comparable to plans widely used in private industry” and “one that
helps to recruit and maintain an excellent and skilled work force”); id. at 11,301 (1986)
(statement of Sen. Stevens) (praising the new retirement plan as “a top notch, economical
retirement system for the Federal workforce which is on part with the best in the private
sector,” providing “solid retirement benefits” and “offering financial security to Federal
retirees”); S. Rep. No. 99-166, at 4 (emphasizing that “the Federal Government must have
the ability to attract and retain highly qualified individuals in all occupations” and that
“[a]n attractive, flexible retirement plan can assist the government in meeting these
objectives . . . to build a career workforce” and “to assist in recruiting midcareer employ-
ees”).

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IV.

“If, upon examination of ‘the particular statutory language at issue, as
well as the language and design of the statute as a whole,’ . . . it is clear
that [the agency’s] interpretation is incorrect, then we need look no fur-
ther[.]” Fort Stewart Sch. v. FLRA, 495 U.S. 641, 645 (1990) (quoting
K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291 (1988)). In our view,
FERS has “directly spoken to the precise question at issue,” Chevron, 467
U.S. at 842, and OPM may not address the Postal Service’s failure to
make the employer contributions required by FERS by denying postal
employees coverage or creditable service under FERS. We do not address
the propriety of any other action OPM might take to address the Postal
Service’s failure to make the required contributions to the Fund.

VIRGINIA A. SEITZ
Assistant Attorney General
Office of Legal Counsel

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