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IG: Postal Service overpaid $6.8 billion to retirement fund

Aug. 24, 2010 - 06:00AM   |  
By STEPHEN LOSEY   |   Comments
The Postal Service's FERS overpayment is on top of an overpayment of anywhere from $50 billion to $75 billion into the Civil Service Retirement System, and a $13 billion overpayment into its future retiree health care liabilities, the OIG said.
The Postal Service's FERS overpayment is on top of an overpayment of anywhere from $50 billion to $75 billion into the Civil Service Retirement System, and a $13 billion overpayment into its future retiree health care liabilities, the OIG said. (File / Getty Images)

The U.S. Postal Service has overpaid roughly $6.8 billion into the Federal Employees Retirement System, according to an Aug. 16 report from the agency's Office of the Inspector General.

The report said the Postal Service should use at least $5.5 billion of that money to shore up its rapidly declining finances. The Postal Service lost $3.8 billion in fiscal 2009, and expects to lose $7 billion this year.

The Postal Service's FERS overpayment is on top of an overpayment of anywhere from $50 billion to $75 billion into the Civil Service Retirement System, and a $13 billion overpayment into its future retiree health care liabilities, the OIG said. Those overpayments have made it tougher for the Postal Service to manage its finances and operate efficiently, the report said.

"Based on this data, the Postal Service's overfunding issue is even larger than we previously reported," the report said. "Postal Service ratepayers continue to pay more than their fair share of retiree benefits. It is important that the trend of overpayments does not continue."

When future expenses such as the FERS sick leave credit, inflation, and cost-of-living adjustments are taken into account, the Postal Service's actual FERS surplus declines to about $5.5 billion, the report said.

Joseph Corbett, the Postal Service's chief financial officer, and Marie Therese Dominguez, USPS vice president of government relations and public policy, agreed with the OIG that Congress should pass legislation to lower the agency's FERS payments. But they said in an Aug. 6 letter to investigators that passing such a change could be challenging because of the crowded congressional calendar and concerns over its budget impact.

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