Skip to comments.Inspector general: Pension payment reform could cure Postal Service financial woes
Posted on 09/06/2011 11:59:42 AM PDT by Colonel Kangaroo
The US Postal Service could fully meet its financial obligations, extinguish debt and have substantial cash flow if Congress rectifies the organization's possible overfunding of its pension and retiree healthcare funds, the USPS' Office of Inspector General (OIG) said in a summary report.
The OIG has issued four reports in the past year on the Postal Service's possible overfunding of its pension funds and retiree healthcare fund. One report found that the USPS has overpaid the Civil Service Retirement System by about $75 billion since 1972 because of an outdated calculation method. Another report found that if the Postal Service is allowed to prefund its pension obligations at levels benchmarked to private-sector companies, it could recover more than $50 billion.
If our proposals to recover the overfunded amounts were placed in effect, the Postal Service could potentially recover $142.4 billion, the OIG summary report stated.
The report said that if the overfunding is rectified, the Postal Service would no longer be required to prefund the Postal Service Retiree Health Benefits Fund by about $5.6 billion a year. It could prefund pensions and retirees' health benefits at benchmarked levels and pay existing retirees' health insurance premiums from the retiree health fund. It could also extinguish its $10 billion debt to the US Treasury Department.
The proposals also could provide significant cash for operations, the OIG said in the report.
Postmaster General John Potter said last week that the Postal Service expects to report a $6 billion loss for fiscal year 2010, with about $5.5 billion of that loss due to its statutorily required payment into the Retiree Health Benefits Fund. Without that payment, the USPS had a $500 million operating loss in FY 2010 despite a drop in mail volume of about 7 billion pieces.
The issue of how to fund the Postal Service's long-term liabilities is expected to play out on Capitol Hill in either a lame-duck session of this Congress or with a new Congress next year.
Sen. Thomas Carper (D-DE) recently introduced a comprehensive postal reform bill that would permanently address the pension and retiree health benefit issues. In its decision to reject the USPS' proposed exigent rate increases for 2011, the Postal Regulatory Commission cited the aggressive retiree health benefits payment schedule as a structural problem causing the Postal Service's liquidity crisis.
USPS’ Office of Inspector General (OIG) said in a summary report.
Is the guy a TeaParty Walker zombie!
5% of your constituency complaining to you is enough correspondence to crash your constituent service.
The answer there is CLOSE THEM ANYWAY.
Let Congress sort out the problem later.
I'm worried more about the correctly paid and underpaid postal workers more than the overpaid ones. But it's hard to separate the sheep from the goats, especially in a unionized workforce.
Bernie Madoff is in prison for doing what Congress does each and every day it meets.
Technology and private competition has killed the Post Office.
When’s the last time someone wrote a letter, and actually mailed it? I can’t remember how long it’s been - but it’s been a LONG time. I write or call my Mother via a cell, or email. I can send photo’s, movies or exchange pleasantries nearly instantaneously.
Facebook and Classmates to keep in touch with those who are on my ‘bulk list’.
When it comes to mailing objects; UPS, Fed-Ex are not only price competitive to the USPS - they ACTUALLY garrantee delivery - not the “Oh, trust us - we’ll really try” line of crud.
Time to shut the doors, and send the folks home. Sorry, the USPS is obsolete, just like 8-Track, Commodore 64’s, Nixon stickers and buggy whips.
You don't even send resumes' that way any more.
I agree that the market has shrunk, but the USPS does have a niche. If you look at the postal threads here, you'll often find people who say that the USPS fulfills their particular need better than UPS and Fed-Ex.
Just choked on my potato salad. Wow, what a blast from the past. I remember paying extra for the nice linen, heavy-weight paper for my laser-printed resume back in my college days - and hand-typing dozens of letters on my Sears typewriter (with a super-cool 3 line LED screen with built-in spell-checking!).
I must have spent $100 on stamps back then; and finally got a job when my roommate and I got in his car and drove down to Texas and went door-to-door looking for a job.
This is the story of America right now. A huge part of our financial troubles are pension related. Politicians from prior generations promised workers something that never could be delivered. Now those workers expect the taxpayer to try to honor those promises even if it means confiscatory taxes. If you simply reset the Post Office pensions to be the same as pensions for other workers—meaning put money for them in a 401K and then they are on their own—there would be no crisis. Yet if that happens, you can be sure that your local post office will turn into a shooting gallery with postal workers “going postal” because someone finally stopped the gravy train.
Granted, for individual, non-urgent letters - it's hard to beat the USPS. But is this niche' commercially viable? Should it be supported by the American Taxpayer, like PBS?
I can't speak for anyone other then my wife and I; but 99% of the mail I get in my mailbox doesn't make it into the house. If I could find a website to de-list myself from the junk mail, my mail demands would plummet. And with that plummet in junk mail, a single postal employee could probably service most of my small town.
Wouldn't that take a constitutional amendment as the Postal Service is one of the few things mandated in the Constitution?
Some of the niches and products make no sense, even if I take advantage of them. For example, is there any reason why there is a "media rate"? Why should the post office care if the 5 pound package I'm sending is a book and a couple of DVDs (media rate) rather than a similarly sized piece of electronics (not media)?
It's not like these places are sacred.
It's a relic of legislation to promote national literacy and knowledge.
That's the difference.
I used to be one of the world's foremost experts in that particular question.
BTW, sometimes the book rate is higher and sometimes lower.
'splain that one!
Yeah, all those overpaid postal workers. According to common wisdom around here postal workers are always lazy and overpaid. I worked as a temporary carrier one summer back in the 70s. It was hard work. Try carrying 30 pounds of mail on your shoulder all day long. I had trouble keeping up with regulars over twice my age. They made it look easy and I was dead tired.
To quote Newman:
“The mail never stops! It just keeps coming and coming and coming, there’s never a let-up! It’s relentless! Every day it piles up more and more and more! And you gotta get it out! “
That pretty much sums it up. There will probably be a much diminished rump structure that remains but it won’t be anything like it is.
At one time there was twice a day mail delivery in business districts. You could answer a letter the same day that you got it. That is so long gone no one even remembers it.
“If you simply reset the Post Office pensions to be the same as pensions for other workersmeaning put money for them in a 401K and then they are on their own”
They already are. The Postal Service moved them off of the Civil Service Retirement System many years ago.
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