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View Diary: Senator Tom Carper Holds Hearing on U.S. Postal Service - Additional Article Included (Video) (11 comments)

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    From the Office of the Inspector General

    The Postal Service has funded its pension benefit obligations at nearly 105 percent and is currently overfunded by $13.1 billion. The law does not allow the Office of Personnel Management (OPM) to alter the contribution formula for the Postal Service, nor can it refund current or future surpluses. Although the Postal Service continues to implement changes to align costs with income, action is needed now to use the current and future surpluses to remain a viable business.

    Further, the Postal Service is required to fully fund its future retiree health care benefit obligations. Currently, the Postal Service has funded nearly 50 percent of that obligation ($44.1 billion of the $90.3 billion future obligation). As an alternative to the annual prefunding payments, which has been difficult, we estimate the Postal Service’s fair market value of real property to be $85 billion, which would be sufficient to cover the remaining unfunded obligation of $46 billion. Recognition of these assets that could be applied to the liability, if ever needed, could prevent the prefunding payments from increasing Postal Service debt.

    The fact remains that no other government bureau has even similar funding requirements, which is the issue that is not part of the conversation about "saving" the post office.
    The Postal Service is currently funded at 49 percent for retiree health care benefits, as of September 30, 2011, and is obligated to prepay $33.9 billion through 2016. Comparatively, the federal government does not prefund its retiree health care benefits, the military is funded at 35 percent, and state governments were funded at 30 percent in FY 2009. Only 38 percent of Fortune 1000 companies that offer retiree health care benefits prefund the expense, at a median funding level of 37 percent.
    It is a legislated "crisis".

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