Last month the Economic Policy Institute, an independent Washington think tank, issued a study (Congressional Mandates Account for Most of Postal Service’s Recent Losses) analyzing the Postal Service’s operating losses over the past three years. It should be noted that while the Institute is nonpartisan, the National Association of Letter Carriers provided support for the research.

While the paper acknowledges the underlying shifts taking place in communications, it cites Congressional mandates, more specifically those requiring prefunding for retiree health benefits, as the principal driver behind the losses. In fact, the study discusses that removing the health benefits mandate would cover the Postal Service’s operational losses for 2007 and 2008 and a good portion for 2009. Furthermore, it points out that the Postal Service’s retiree benefits plan currently is funded at a significantly higher level than a sample of large private-sector employers that offer similar pensions.

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The authors recommend a number of steps for Congress:

•Direct the Office of Personnel Management to recalculate Postal Service pension obligations using proper methodologies.
•Transfer any surplus discovered to the retiree health benefits fund.
•Should the surplus be sufficient to fully fund all benefit obligations, permit the Postal Service to pay off debt with the remaining surplus.

The paper concludes that issues involving the overpayments must be resolved before turning to other major actions, such as cutting Saturday delivery.

What do you think of the pension debate? What should Congress do?

This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).

Comments (9)

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  • anon

    !st you should take into account the millions if not billiions of dollars spent on grievances, the highest in the country if not the world and maybe combined. next the amounts of money for people on workers compensation because of the postal services cavallier attitude towards the dignity and respect of it's employees, which are of no concern to govt. or the unions. They would not be in this situation if you did'nt have the ratio of 1 supervisor for every 20 employees, a office of 100 to 125 employees requires 1 postmaster and at least 4 supervisors at the sum of around 300 thousand per year salary not including the grievances they generate the post office needs to be sold to a private party it should be able to function with half the employees. ask how much is spent on grievaneces, workers comp claims and lawsuits everyyear their is your answer

    Sep 09, 2011
  • anon

    Saturday delivery is absurd. There is a weak case for 5 days. We know the USPS will be obsolete in 15-20 years unless they transition to an internet model.

    Oct 16, 2010
  • anon

    I am afriad that its the sign of the time. We are seeing cut back in a whole host of sectors. At the end of the day, its has to be done. Otherwise the economy will never recover. I just think goverment offcial have gone about informing people the wrong way.

    Sep 25, 2010
  • anon

    There must be some sort of compromise between slashing benefits and drastically cutting services. What is obvious though is the Post Office cannot continue to operate at a loss. It has a history of supporting itself without taxpayer money. I am sure it can do it again.

    Sep 18, 2010
  • anon

    I really don't like the idea that every time restrictions need to be made they are removing something beneficial to the workers. Instead of removing the health benefits and reduce the pension benefits, just remove some high paid employees. Often the top paid employees cover half or even more of the paid amount.

    Sep 14, 2010
  • anon

    The postal Service has to down size the over loaded top management structure, They have up graded the first line supervisor and other managers from EAS-15 to EAS -17 so they can increase the salaries of the top people! The supervisor’s manager a EAS-24 makes over $100,000. That is $30,000 more that the supervisor and the supervisors make $20,000 more than the craft. You can imagine what the 40 Vice presidents and 500 officers make. As for the postmaster general just look at his retirement package!

    Sep 14, 2010
  • anon

    After reading the Hay, <a href="" rel="nofollow"> Mercer/PRC </a> and <a href="" rel="nofollow"> Segal <a> reports, I suggest the following opinion: Congress should reimburse USPS exactly $65.5 billion (+/-$3 billion). Also, USPS already payed $12.4 billion towards RHBF/PAEA payments. Apply $43.4 billion as transferable credit from the overcharge towards meeting the funding requirement until 2017. USPS headquarters will suddenly find themselves faced with a $22.2 billion (+/-$3 billion) ... profit. I think the Department of Treasury would surely appreciate a gradual payment plan. After all, we're barely catching our breath after a Republican-indulged economic crisis. TO postal execs: please don't screw it up this time! VOE

    Sep 13, 2010
  • anon

    I believe that restoring the monies to the USPS will make the Postal Service a viable government asset. Once again Congress along with former President W. Bush had their hands in trying to destroy the postal service as we know it today. Can't understand why it has taken so long for the USPS or OPM to ask for the money back...or has it spent by Congress/Senate already. I can only assume too many politicians have money invested in private delivery firms to handle the mail. That should never happen.

    Sep 13, 2010
  • anon

    Gee I dunno? Perhaps you should first ask the people located in the Treasury Buildings on Pennsylvania Avenue. And, don't forget to ask those fellas in the adjacent PNC &amp; Bank of America (aka "BOA") buildings what to do? I mean afterall, consider the statement below, and how they managed to reinvent modern western economics... 10/09/2008 French Finance Minister “More wealth has been extinguished in the past several days, than has been created, in the last several years.” I don't think I'll ever forget the words below.

    Sep 13, 2010

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