FUNDING OF COST-OF-LIVING ADJUSTMENTS FOR CERTAIN POSTAL SERVICE ANNUITANTS AND SURVIVOR ANNUITANTS.

SEC. 4002. FUNDING OF COST-OF-LIVING ADJUSTMENTS FOR CERTAIN POSTAL SERVICE ANNUITANTS AND SURVIVOR ANNUITANTS. (a) In General.—Section 8348 of title 5, United States Code, is amended by adding at the end the following: “(m)(1) Notwithstanding any other provision of law, the United States Postal Service shall be liable for that portion of any estimated increase in the unfunded liability of the Fund which is 103 STAT. 2134attributable to any benefits payable from the Fund to former employees of the Postal Service who first become annuitants by reason of separation from the Postal Service on or after October 1, 1986, or to their survivors, or to the survivors of individuals who die on or after October 1, 1986, while employed by the Postal Service, when the increase results from a cost-of-living adjustment under section 8340 of this title. “(2) The estimated increase in the unfunded liability referred to in paragraph (1) of this subsection shall be determined by the Office after consultation with the Postal Service. The Postal Service shall pay the amount so determined to the Office in 15 equal annual installments with interest computed at the rate used in the most recent valuation of the Civil Service Retirement System, and with the first payment thereof due at the end of the fiscal year in which the cost-of-living adjustment with respect to which the payment relates becomes effective. “(3) In determining any amount for which the Postal Service is liable under this subsection, the amount of the liability shall be prorated to reflect only that portion of total service (used in computing the benefits involved) which is attributable to civilian service performed after June 30, 1971, as estimated by the Office.”. (b) Effective Date; Size of Annual Installments to Fund Earlier COLAs; Additional Amount Initially Payable.— (1) Effective date.—This section and the amendment made by this section shall be effective as of October 1, 1986. (2) Size of annual installments to fund previous years’ COLAs.— Notwithstanding any provision of section 8348(m) of title 5, United States Code (as added by subsection (a)), the estimated increase in the unfunded liability referred to in paragraph (1) of such section 8348(m) shall be payable based on annual installments equal to— (A) $100,000 each, with respect to the cost-of-living adjustment which took effect in fiscal year 1987; (B) $6,000,000 each, with respect to the cost-of-living adjustment which took effect in fiscal year 1988; and (C) $15,000,000 each, with respect to the cost-of-living adjustment which took effect in fiscal year 1989. (3) Additional amount payable.— (A) Generally.—The first payment made under the provisions of section 8348(m) of title 5, United States Code (as added by subsection (a)) shall include, in addition to the amount which would otherwise be payable at that time, an amount equal to the sum of any amounts which would have been due under those provisions in any prior year if this section had been enacted before October 1, 1986. (B) Computation method.—Subject to paragraph (2), the additional amount payable under this paragraph shall be computed in accordance with section 8348(m) of title 5, United States Code (as added by subsection (a)), and shall include interest. Interest on an amount— (i) shall be computed at the rate used in the most recent valuation of the Civil Service Retirement System; (ii) shall accrue, and be compounded, annually; and (iii) shall be computed for the period beginning on the date by which such amount should have been paid 103 STAT. 2135(if this section had been enacted before October 1, 1986) and ending on the date on which payment is made.