USPS pension puzzle


Here’s an intriguing nugget from the U.S. Postal Service’s latest quarterly report: Even as the Obama administration agrees that the Postal Service is owed a huge refund on past payments to its pension program, the Office of Personnel Management—headed by Obama appointee John Berry—is requiring it to shell out more for current payments.

For the first quarter of fiscal 2011, the Postal Service’s contributions to the Federal Employees Retirement System, or FERS, rose by $24 million—from $1,469 million to $1.493 million—versus the same period in fiscal 2010, even though the USPS workforce continued to shrink, the report says. The reason, according to the Postal Service, is that its employer contribution rate increased from 11.2 percent to 11.7 percent of eligible payroll. The agency is appealing that boost to a federal board of actuaries on the grounds that its FERS obligation is already overfunded to the tune of some $6.9 billion.

In its newly released 2012 budget request, the White House proposed refunding the Postal Service that money over 30 years, starting with a $550 million down payment this year.

At least to non-actuarial minds, it seems contradictory to be giving with one hand and taking away with the other. We’ve asked OPM for an explanation; if we get one, we’ll post it here.


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  1. “For the first quarter of fiscal 2011, the Postal Service’s contributions to the Federal Employees Retirement System, or FERS, rose by $24 million—from $1.469 million to $1.493 million—”

    I’m sure you meant to say “from $1.469 BILLION to $1.493 BILLION”…

  2. Neither Republican nor Democratic politicians would come out and say the government workers were so productive so as to overfund their pensions. Funny how these pols who claim to be Christian keep perpetrating (and scape-goating) govt’ workerswith false information. “Thou shall not bear false witness” does not apply to them?

  3. it seems no one in Washington believes we pay for our retirement or future health benefits. our elected officials are never wrong, so it must be true.

  4. Herman, a broken business model DOES NOT last well over 200 years. The USPS was not designed as a business, it is a SERVICE to the American public. It has obviously been used as a cash cow by the Federal government. This has to do with over payments made for many years that no other federal agency (or even PRIVATE!!!) businesses have to make!

    Your comment is more a reflection on your lack of education on basic facts and spewing of ignorance, than on your understanding of complex situations.

  5. If the Postal Service doesn’t have to pay into the retirement fund, I’m sure the BOG will use the money to give as incentives to get employees to retire early. That will be the only way to get employees to retire (INCENTIVES), you know like MONEY!

  6. Sir, what you have touched is one of the most disgraceful boondoggles of modern times. The Congress passed the 2006 PAEA which mandated that the Postal Service “pre-pay” it’s retiree health benefits to the tune of $5.5 billion per year. The Postal Service was (and is) the only federal agency or private company in the country that is doing this as it is deemed inefficient. The Postal Service carried this burden for 2.5 years and then the recession hit. With it’s revenue dropping, Congress has refused to remove this millstone and allow the USPS to ride out the recession. Audits from both the GAOand the OIG have shown that the Postal Service would have been profitable it not for the congressional meddling. Why, one might ask, is Congress purposely damaging the Postal Service?
    Then it was discovered that the Postal Service has been overcharged approximately $60 billion by the Treasury for it’s contribution to the retirement system. Verified, Congress now refuses to return the money and claims that the Postal Service is a broken business model and is going out of business due to email.
    Fact : the Postal Service has been “in the black” for decades without any taxpayer money.
    Question : how can any company survive having $5.5 billion taken from it every year ?
    Question : Why, if Congress is so against “bailouts” would they not give the Postal Service back it’s overpayments to the retirement system?
    Fact : Congress bailed out the auto companies when their ” business models were and are broken, yet refuses to work with their own agency?
    Question : WHO is behind the 2006 PAEA and why does Congress refuse to do the common sense thing and remove the $5 billion mandate and give the Postal Service their retirement money back?
    Question : WHY is Congress purposely destroying the Postal Service when repeated polls have shown it to be the gency “most trusted” by the public ?
    Last Question : Why will Congress not tell the truth about what it is trying to do to the Postal Service?

  7. I’m there with you J Jameson. Why do they keep calling it a bailout? If it is so simple why does congress make it difficult because they have to justify there jobs. They are using our money to bailout the government. What a shame and shame on them. They used the taxpayer money to bail out the banks and the auto company but won’t even give the post office back their own money, which would make us a viable company.

  8. 1.3 billion dollars to fed-ex ????transportation only…ontime ??PITTFULL…them and the top 3 recivers of usps money…who runs this thing??clerks..mailhandlers..and custodians STOOPID

  9. Seems funny FERS began in Jan 1984. Fast forward the required 30 years of service to collect the secretive Social Security supplement and you come to Jan 2014 less than 3 years away. Perhaps they have to get rid of the USPS as we know it because the Soc Sec supplenent money was spent elsewhere . If they can destroy the USPS before Jan 2014 they can claim none are elegible for the supplement(except those over 60 with 20 years of service) because they left the service with less than the required 30 years to collect it!

  10. jameson is 100 percent correct. get off the **** and dow whats right… but they wont…. ever.. we all know that.. its politics..american style..

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