• on Oct 16th, 2012 in Strategy & Public Policy | 13 comments
    There has been a surplus in the U.S. Postal Service’s Federal Employees’ Retirement System (FERS) pension program since 1992. Most recently, the FERS surplus was projected to be $11.4 billion, accounting for most of the Postal Service’s total $13.1 billion pension surplus. The Office of Inspector General (OIG) asked Hay Group, an actuarial firm, to examine the causes of the FERS surplus, and a new OIG white paper presents the results of Hay Group’s work. Hay Group found that the main reason for the surplus was differences between the Postal Service and the rest of the federal government. In particular, postal salary growth was lower than the assumptions made in the liability estimates. The surplus grew as actual postal experience replaced the initial assumptions used for the entire FERS population. Hay Group recommends using Postal Service-specific assumptions to provide a more accurate estimate of the liability. When Postal Service-specific assumptions are used to measure the Postal Service’s liability, the surplus increases from $11.4 billion to $24 billion. Given the Postal Service’s current financial health, the existence of the FERS surplus raises some questions. What should be done about the postal FERS surplus? Right now, there is no mechanism to return a FERS surplus once it occurs. Also, what about the contribution rate? The Postal Service currently pays the same FERS contribution rate as other federal agencies, 11.9 percent of payroll for most employees. This contribution rate has increased twice in the past 3 years despite the existence of a surplus for the Postal Service. Should the Postal Service’s contributions be adjusted to reflect its specific characteristics? What do you think? Share your thoughts in the comments below.
  • on Jul 9th, 2012 in Strategy & Public Policy | 1 comment
    Detail from Iron Mountain, Michigan
    Post Office Mural

    Some Americans may be aware that Benjamin Franklin was the first postmaster general of the United States, appointed by the Continental Congress during the American Revolution. But, unfortunately, our history lessons have otherwise overlooked the Post Office’s contribution to the development of the nation. A new paper entitled Postal Service Contributions to National Infrastructure describes some of the ways the Postal Service was used to support national infrastructure growth. For example, did you know?

    • In the early years of the nation, highly subsidized newspaper rates led to the growth of a national media culture.
    • Funding to transport mail supported a stagecoach industry that carried passengers across the nation. This model was later repeated in the early airline industry when mail contracts supported passenger air transportation.
    • The start of rural free delivery at the turn of the 20th century forced farmers and communities to improve the condition of rural roads as a condition of service.

    In these ways, the Post Office Department helped conquer the great distances of the country, fill infrastructure gaps, buoy burgeoning technologies and industries, and bind the nation together. Postal policy decisions also generated important debates about the appropriate roles of the government and the private sector. In the 1840s, a new age of low postal rates and two-way communications was initiated in part because of private sector competition to the monopoly, and the United States was a latecomer to Parcel Post compared to other nations because of concern by the railroads and small rural stores over the incursion into their areas of business. By the 1960s, the Post Office was struggling with inefficiency and a large deficit. The President’s Commission on Postal Organization (known as the Kappel Commission) argued that the Post Office should run more like a business. Since then, the Postal Service’s secondary role in contributing to the expansion of the national infrastructure has lessened. Today, the decentralized and fragmented nature of the digital age may be creating new infrastructure gaps and under-served citizens. Is there again a place for the Postal Service in serving the nation’s infrastructure needs? Or is the Postal Service’s role of supporting new infrastructures behind it? What do you think?

  • on May 29th, 2012 in Strategy & Public Policy | 1 comment
    When online, how do you know who you’re really communicating with? Does that affect your shopping or banking habits? Do you know people who don’t use the Internet much because they are afraid of identity theft? The latest statistics from a Pew Research Center study demonstrate the pull of the Internet: •80 percent of Americans are users, whether through personal computer, tablet, or smartphone; •many of those users do not conduct any kind of commerce; •30 percent have not made a purchase online; •and 40 percent do not bank online. Would a more secure approach to online identity raise those figures? The Office of Inspector General’s new paper Digital Identity: Opportunities for the Postal Service examines the world of digital identity as well as many existing digital authentication solutions, including pilot projects, and potential roles for the Postal Service in the digital identity ecosystem. The paper posits that there is a need for a trusted and neutral body to identify, authenticate, and certify users in a straightforward manner that reduces sign-up friction and maintains privacy with very clear, concise, and enforceable policy guidelines. The Postal Service, given its national presence, physical infrastructure, and history of protecting privacy, could operate in a number of roles: •As a Trusted Third Party Online – The Postal Service could verify individual or business addresses (with permission from each user) for other organizations to facilitate eCommerce or other online transactions. •As an Identity Provider – The Postal Service could offer its own digital identity service, an opt-in service verifying attributes of consumers, businesses and organizations. •Providing in-Person Verification Services – The Postal Service could expand the work it already does for passports and offer in-person verification of mailing addresses through its network of post offices and postal carriers. What do you think? Is there a role for the Postal Service in digital identity? Share your thoughts below!

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