Photo of a hand turning a "Risk" knob next to a gauge labeled, "Return".
  • Project Title:
  • Foreign Posts' Retirement Asset Investments
  • Start Date:
  • Monday, September 10, 2018
  • Estimated Report Release Date:
  • March 2019

Employees of the Postal Service participate in two government-wide pension plans administered by the U.S. Office of Personnel Management (OPM): the Civil Service Retirement System and Federal Employee Retirement System. The assets of these plans are held in one fund, the Civil Service Retirement and Disability Fund (CSRDF), and are managed by OPM and the Department of the Treasury.

In addition to drawing pension benefits, eligible retirees may continue participating in the OPM-administered Federal Employees Health Benefits program. The Postal Service is responsible for the employer’s share of the premium costs and has therefore set aside funds in the Postal Service Retiree Health Benefits Fund (PSRHBF).

The CSRDF and PSRHBF are financed by employee and employer contributions and interest earned. Currently, both funds can only be invested in U.S Treasury securities. Advantages of the current system include the special-issue, fixed rate Treasury securities carry no risk of losing investment principal, and managing the investment does not require services from financial institutions or non-governmental parties, so costs are low. A disadvantage is a limited amount of investment income that can be earned because of restricted investment options.

From our research, the Postal Service appears to be the only major postal system around the world with retirement funds invested exclusively in obligations of the country’s central government. Within the U.S., the federal corporation that insures the pension benefits of non-federal employees is allowed to invest in a diverse portfolio which can include U.S. government securities, asset-backed securities, pooled funds, real estate, and other assets. A more diverse portfolio of investments may garner more investment income; however, there may be a greater risk of losing the investment principal and there may be additional costs in the fees associated with managing the portfolio.

  • Do you have any knowledge of foreign posts retirement investment strategies?
  • Can the Postal Service learn anything from these strategies?

     

Comments (1)

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  • anon

    I am a career letter carrier, FERS-FRAE and have a vested interest in the health of the CSRDF. I would prefer to see the Postal Service be allowed to expand the investment options. This would potentially allow greater investment returns, reducing the costs to the employer and or employees. This could help create much needed financial stability for the Postal Service which in turn allows the American public to benefit from the worlds most efficient delivery service while providing hundreds of thousands of middle class jobs. I believe that there should be strict oversight over any possible fund managers. Something similar to the Thrift Savings Plan would likely be appropriate.

    Oct 25, 2018

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