The report's conclusion was welcomed by Sen. Tom Carper (D-Del.), who chairs a federal financial management subcommittee whose purview includes the Postal Service. (HEATHER WINES / GANNETT NEWS SERVICE)
The struggling U.S. Postal Service should be spared between $50 billion and $55 billion in projected long-term pension obligations, according to an outside actuary's report submitted today to Congress by the Postal Regulatory Commission.
The report, produced by The Segal Company, was intended to provide an independent look at the allocation of Civil Service Retirement System costs between the Postal Service and its predecessor, the U.S. Post Office Department.
The Office of Personnel Management had reckoned the postal service's share at $198 billion as of last September. OPM also received a copy of the Segal report today and will now have to give its response to the commission, Congress and the Postal Service.
An OPM spokesman could not be reached for comment late this afternoon. But Segal's conclusion was welcomed by Sen. Tom Carper, a Delaware Democrat who chairs a federal financial management subcommittee whose purview includes the Postal Service.
"This is a very good day indeed because rarely in life do you discover an extra $50 billion lying around," Carper said in a news release. While that sum represents less than 25 percent of the postal service's projected long-term deficit, Carper added, it will help Congress in trying to provide the agency "with much-needed relief from the overly-aggressive retiree health funding that was placed on in 2006."
The Segal study had been commissioned in May by the PRC at the Postal Service's request after a January report by its inspector general concluded that the current allocation of retirement costs is "inequitable" and had resulted in USPS's overpaying $75 billion into the pension fund. In today's report, Segal found the differences between OPM and the inspector general fell mainly in two areas.
The central issue is how to factor in the impact of increases in postal salaries on pensions related to service in the Post Office Department, which was abolished in 1971.
While OPM's approach — which the agency says is mandated by a 1974 law — is within the range of acceptable options, the report says, Segal took a compromise approach using private industry accounting standards. The five-member Postal Regulatory Commission recommends that OPM use "modern methods for allocating responsibility between past and future employees," its chairman, Ruth Goldway, wrote today in a transmittal letter accompanying the report to Postmaster General John Potter.