It’s no secret the Postal Service is in a financial crisis after a $3.8 billion loss in 2009, and a projected $7 billion loss for 2010 after approximately $4 billion in cost reductions. In January 2010, the OIG reported that the Postal Service had been overcharged for FERS’s sister retirement plan, the Civil Service Retirement System or CSRS, by $75 billion. There is a complication that may reduce the FERS surplus in the future. President Obama recently signed a bill granting credit for unused sick leave for FERS retirees. The exact effect on the pension liability is unknown, but it doesn’t take an actuary to understand that it creates an additional future obligation. If the Postal Service has met its current financial obligations for FERS, should it be relieved of its future contributions? What do you think? This topic is hosted by the OIG’s Office of Audit Financial Reporting team.
on May 3rd, 2010
| 11 comments
The Federal Employees’ Retirement System (FERS) is one of the retirement programs of the U.S. government, and benefits are extended to U.S. Postal Service employees. FERS is administered by the Office of Personnel Management (OPM). Congress established the guidelines for OPM to set contribution rates and can alter them by passing new law or amending an existing law. Postal Service employees who began their careers after December 31, 1983, are automatically enrolled in the FERS. For Postal Service employees, a majority of FERS funding is accomplished through Postal Service contributions. The rest is paid by postal employees. During fiscal year 2009, the Postal Service contributed $3 billion to FERS or 11.2 percent of the salaries for FERS employees. As of September 30, 2009, the Postal Service reported a fully funded FERS pension plan that exceeds liabilities by $6.8 billion.
on Nov 9th, 2009
in Delivery & Collection
| 65 comments
News about disappearing collection boxes is everywhere these days. Even BBC News ran a story on the decline of the blue collection box in the United States.
The Postal Service argues that picking up mail from collection boxes is expensive. Removing underused boxes is a cost savings move and a reasonable response to the economic crisis. The Postal Service is removing boxes with less than 25 stamped mail pieces per day.
Critics wonder if there is adequate analysis to support the 25-piece minimum and whether one reason for removing collection boxes — in addition to the minimal cost savings — is that the Postal Service does not want to be criticized for poor service. Fewer boxes mean fewer opportunities to miss a collection or to pick up mail too early.
Is the Postal Service thinking too narrowly and missing some of the value of collection boxes? The ubiquitous presence of the boxes is free advertising for the ailing agency. How much would a private sector company pay to be allowed to put a collection box anywhere it wanted to in the country? Millions? Billions?
What do you think? Is removing collection boxes a reasonable cost-cutting move or a strategic mistake that the Postal Service will later regret?
This topic is hosted by the OIG's Risk Analysis Research Center (RARC).
on Jul 20th, 2009
in Ideas Worth Exploring
| 127 comments
As noted in the update on Wednesday, there was a tremendous response to last week’s brainstorming exercise! As of Friday afternoon there were almost 350 comments posted -- many more than usual! If nothing else, this shows widespread and heartfelt concern for the well-being and financial viability of the Postal Service. Not only was the quantity of postings notable, so was the variety of ideas; they covered a broad spectrum, from cost-cutting possibilities to new lines of business. And many of the postings received replies, for instance Nostradamus' original posting received 13 replies, which is a testament to the thoughtfulness of everyone involved. The creativity shown by the participants makes categorizing the ideas difficult, but we’ve attempted to develop poll questions to highlight the common themes, and get your reaction as to the relative importance of these items. While every comment received attention, some ideas stood out as particularly thought-provoking or creative. In order to gauge your reactions as to the viability and value of a sample of ideas, we’ve developed another poll question. The following ideas were submitted by Sheri, Randy, D. Traver, Move into the future, JM, and others. This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).