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Inspector general: Pension payment reform could cure Postal Service financial woes
Direct Marketing News ^ | October 5, 2010 | Kate Muth

Posted on 09/06/2011 11:59:42 AM PDT by Colonel Kangaroo

The US Postal Service could fully meet its financial obligations, extinguish debt and have substantial cash flow if Congress rectifies the organization's possible overfunding of its pension and retiree healthcare funds, the USPS' Office of Inspector General (OIG) said in a summary report.

The OIG has issued four reports in the past year on the Postal Service's possible overfunding of its pension funds and retiree healthcare fund. One report found that the USPS has overpaid the Civil Service Retirement System by about $75 billion since 1972 because of an outdated calculation method. Another report found that if the Postal Service is allowed to prefund its pension obligations at levels benchmarked to private-sector companies, it could recover more than $50 billion.

“If our proposals to recover the overfunded amounts were placed in effect, the Postal Service could potentially recover $142.4 billion,” the OIG summary report stated.

The report said that if the overfunding is rectified, the Postal Service would no longer be required to prefund the Postal Service Retiree Health Benefits Fund by about $5.6 billion a year. It could prefund pensions and retirees' health benefits at benchmarked levels and pay existing retirees' health insurance premiums from the retiree health fund. It could also extinguish its $10 billion debt to the US Treasury Department.

The proposals also could provide significant cash for operations, the OIG said in the report.

Postmaster General John Potter said last week that the Postal Service expects to report a $6 billion loss for fiscal year 2010, with about $5.5 billion of that loss due to its statutorily required payment into the Retiree Health Benefits Fund. Without that payment, the USPS had a $500 million operating loss in FY 2010 despite a drop in mail volume of about 7 billion pieces.

The issue of how to fund the Postal Service's long-term liabilities is expected to play out on Capitol Hill in either a lame-duck session of this Congress or with a new Congress next year.

Sen. Thomas Carper (D-DE) recently introduced a comprehensive postal reform bill that would permanently address the pension and retiree health benefit issues. In its decision to reject the USPS' proposed “exigent” rate increases for 2011, the Postal Regulatory Commission cited the aggressive retiree health benefits payment schedule as a structural problem causing the Postal Service's liquidity crisis.


TOPICS: Business/Economy
KEYWORDS: postal; postoffice; usps
An article from October is not breaking news, but it does shed some light on the source of current stories about USPS financial woes. According to the OIG, just allowing the USPS to fund pensions like a private company would would cure its ills and we all want the USPS to be run like a private company!
1 posted on 09/06/2011 11:59:49 AM PDT by Colonel Kangaroo
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To: Colonel Kangaroo
““If our proposals to recover the overfunded amounts were placed in effect, the Postal Service could potentially recover $142.4 billion”
You think that money is in some lock box waiting for the overpaid union postal workers to draw from...... Get in line with SS, that box is full of IOU’s
2 posted on 09/06/2011 12:03:09 PM PDT by martinidon
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To: Colonel Kangaroo

USPS’ Office of Inspector General (OIG) said in a summary report.

What!

Is the guy a TeaParty Walker zombie!

LOL


3 posted on 09/06/2011 12:04:09 PM PDT by NoLibZone (Obama is bad luck for the US.)
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To: Colonel Kangaroo
AT the time the Senate was looking around for a way to save the small post offices. Every Senator has a bunch of them ~ some more than others but all share in the problem.

5% of your constituency complaining to you is enough correspondence to crash your constituent service.

The answer there is CLOSE THEM ANYWAY.

Let Congress sort out the problem later.

4 posted on 09/06/2011 12:05:07 PM PDT by muawiyah
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To: martinidon
You think that money is in some lock box waiting for the overpaid union postal workers to draw from......

I'm worried more about the correctly paid and underpaid postal workers more than the overpaid ones. But it's hard to separate the sheep from the goats, especially in a unionized workforce.

5 posted on 09/06/2011 12:06:02 PM PDT by Colonel Kangaroo
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To: martinidon

Bernie Madoff is in prison for doing what Congress does each and every day it meets.


6 posted on 09/06/2011 12:06:52 PM PDT by NoLibZone (Obama is bad luck for the US.)
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To: Colonel Kangaroo

Technology and private competition has killed the Post Office.

When’s the last time someone wrote a letter, and actually mailed it? I can’t remember how long it’s been - but it’s been a LONG time. I write or call my Mother via a cell, or email. I can send photo’s, movies or exchange pleasantries nearly instantaneously.

Facebook and Classmates to keep in touch with those who are on my ‘bulk list’.

When it comes to mailing objects; UPS, Fed-Ex are not only price competitive to the USPS - they ACTUALLY garrantee delivery - not the “Oh, trust us - we’ll really try” line of crud.

Time to shut the doors, and send the folks home. Sorry, the USPS is obsolete, just like 8-Track, Commodore 64’s, Nixon stickers and buggy whips.


7 posted on 09/06/2011 12:12:45 PM PDT by Hodar ( Who needs laws; when this FEELS so right?)
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To: Hodar
When’s the last time someone wrote a letter, and actually mailed it?

You don't even send resumes' that way any more.

8 posted on 09/06/2011 12:14:55 PM PDT by E. Pluribus Unum (Palin is coming, and the Tea Party is coming with her.)
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To: Hodar
When it comes to mailing objects; UPS, Fed-Ex are not only price competitive to the USPS - they ACTUALLY garrantee delivery - not the “Oh, trust us - we’ll really try” line of crud.

I agree that the market has shrunk, but the USPS does have a niche. If you look at the postal threads here, you'll often find people who say that the USPS fulfills their particular need better than UPS and Fed-Ex.

9 posted on 09/06/2011 12:16:16 PM PDT by Colonel Kangaroo
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To: E. Pluribus Unum
You don't even send resumes' that way any more.

Just choked on my potato salad. Wow, what a blast from the past. I remember paying extra for the nice linen, heavy-weight paper for my laser-printed resume back in my college days - and hand-typing dozens of letters on my Sears typewriter (with a super-cool 3 line LED screen with built-in spell-checking!).

I must have spent $100 on stamps back then; and finally got a job when my roommate and I got in his car and drove down to Texas and went door-to-door looking for a job.

10 posted on 09/06/2011 12:19:50 PM PDT by Hodar ( Who needs laws; when this FEELS so right?)
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To: Colonel Kangaroo

This is the story of America right now. A huge part of our financial troubles are pension related. Politicians from prior generations promised workers something that never could be delivered. Now those workers expect the taxpayer to try to honor those promises even if it means confiscatory taxes. If you simply reset the Post Office pensions to be the same as pensions for other workers—meaning put money for them in a 401K and then they are on their own—there would be no crisis. Yet if that happens, you can be sure that your local post office will turn into a shooting gallery with postal workers “going postal” because someone finally stopped the gravy train.


11 posted on 09/06/2011 12:23:13 PM PDT by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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To: Colonel Kangaroo
but the USPS does have a niche. If you look at the postal threads here, you'll often find people who say that the USPS fulfills their particular need better than UPS and Fed-Ex.

Granted, for individual, non-urgent letters - it's hard to beat the USPS. But is this niche' commercially viable? Should it be supported by the American Taxpayer, like PBS?

I can't speak for anyone other then my wife and I; but 99% of the mail I get in my mailbox doesn't make it into the house. If I could find a website to de-list myself from the junk mail, my mail demands would plummet. And with that plummet in junk mail, a single postal employee could probably service most of my small town.

12 posted on 09/06/2011 12:23:32 PM PDT by Hodar ( Who needs laws; when this FEELS so right?)
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To: muawiyah; Hodar
The answer there is CLOSE THEM ANYWAY.

Wouldn't that take a constitutional amendment as the Postal Service is one of the few things mandated in the Constitution?

13 posted on 09/06/2011 12:32:27 PM PDT by crusty old prospector
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To: Colonel Kangaroo
I agree that the market has shrunk, but the USPS does have a niche. If you look at the postal threads here, you'll often find people who say that the USPS fulfills their particular need better than UPS and Fed-Ex.

Some of the niches and products make no sense, even if I take advantage of them. For example, is there any reason why there is a "media rate"? Why should the post office care if the 5 pound package I'm sending is a book and a couple of DVDs (media rate) rather than a similarly sized piece of electronics (not media)?

14 posted on 09/06/2011 12:39:18 PM PDT by KarlInOhio (Due to the earthquake the president has officially implemented Rule 18-1.)
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To: crusty old prospector
No. We are speaking only of the 28,000 small rural and unnecessary post offices. The remaining facilities can provide all the services needed.

It's not like these places are sacred.

15 posted on 09/06/2011 12:45:58 PM PDT by muawiyah
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To: KarlInOhio
Some of the niches and products make no sense, even if I take advantage of them. For example, is there any reason why there is a "media rate"? Why should the post office care if the 5 pound package I'm sending is a book and a couple of DVDs (media rate) rather than a similarly sized piece of electronics (not media)?

It's a relic of legislation to promote national literacy and knowledge.

16 posted on 09/06/2011 12:47:32 PM PDT by Colonel Kangaroo
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To: KarlInOhio
The reason you should care is the one conveys information and the other conveys merchandise.

That's the difference.

I used to be one of the world's foremost experts in that particular question.

BTW, sometimes the book rate is higher and sometimes lower.

'splain that one!

17 posted on 09/06/2011 12:47:48 PM PDT by muawiyah
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To: Colonel Kangaroo

Yeah, all those overpaid postal workers. According to common wisdom around here postal workers are always lazy and overpaid. I worked as a temporary carrier one summer back in the 70s. It was hard work. Try carrying 30 pounds of mail on your shoulder all day long. I had trouble keeping up with regulars over twice my age. They made it look easy and I was dead tired.

To quote Newman:

“The mail never stops! It just keeps coming and coming and coming, there’s never a let-up! It’s relentless! Every day it piles up more and more and more! And you gotta get it out! “


18 posted on 09/06/2011 12:49:56 PM PDT by Pelham ("Resist we much!" - Al 'Jiffypop' Sharpton)
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To: Hodar

That pretty much sums it up. There will probably be a much diminished rump structure that remains but it won’t be anything like it is.

At one time there was twice a day mail delivery in business districts. You could answer a letter the same day that you got it. That is so long gone no one even remembers it.


19 posted on 09/06/2011 12:56:13 PM PDT by Pelham ("Resist we much!" - Al 'Jiffypop' Sharpton)
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To: Opinionated Blowhard

“If you simply reset the Post Office pensions to be the same as pensions for other workers—meaning put money for them in a 401K and then they are on their own”

They already are. The Postal Service moved them off of the Civil Service Retirement System many years ago.


20 posted on 09/06/2011 12:58:40 PM PDT by Pelham ("Resist we much!" - Al 'Jiffypop' Sharpton)
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To: Pelham
I worked as a temporary carrier one summer back in the 70s. It was hard work. Try carrying 30 pounds of mail on your shoulder all day long. I had trouble keeping up with regulars over twice my age. They made it look easy and I was dead tired.

Yep, the mail doesn't move itself. Arguments can be made about level of compensation and pensions, but most postal work is pretty heavy work. I wish some of the critics could have seen the action at my old GMF at 4:30AM with only 30 minutes to go until time to get the next dispatch out.

21 posted on 09/06/2011 1:02:16 PM PDT by Colonel Kangaroo
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To: Colonel Kangaroo

One of the oddities about the job that you don’t expect is the constant time pressure. That silly quote of Newman’s from the Seinfeld show “the mail never stops!” tells me that one of the writers knew what it was like to work there.

I worked again as a clerk during the Christmas rush. It was the late afternoon-night shift. UPS was on strike that year so the Post Office was deluged with parcels. One of the clerks would climb up to the top of a giant metal multi-sided “pyramid”, and a couple of us would pile packages onto a conveyor belt leading up to him. He would sort them by zip code, each side of the pyramid being a different zip.

Another odd feature of postal facilities is the inspector’s galleries. Those give you the creeps the first time you realize what they are.


22 posted on 09/06/2011 1:21:35 PM PDT by Pelham ("Resist we much!" - Al 'Jiffypop' Sharpton)
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To: Colonel Kangaroo

I’m sure all those package delivery companies and the internet are going to go away so it can be just like the good old days. 570,000 employees and they don’t know where to cut to balance their budget.


23 posted on 09/06/2011 1:38:45 PM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: Pelham
I remember one UPS strike. I was working in a smaller office then and the other early clerk was on vacation. by the time the carriers arrived, each of their cases were surrounded with a Great Wall of China.

One day we actually heard noise from the inspector's gallery. Even though you were doing nothing wrong, it's still an unnerving sensation.

24 posted on 09/06/2011 1:50:34 PM PDT by Colonel Kangaroo
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To: Pelham
They used to put a rubber water tight seal around the break out doors at the bottom on those gallery set ups. Then one day a waterpipe broke and filled up a breakout tube and an inspector fell in. No one could hear his cries for help.

The design was changed and the water tight seals were replaced.

25 posted on 09/06/2011 2:08:09 PM PDT by muawiyah
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To: martinidon
Nope. It's in an empty cigarette carton under Obama’s desk in the oval office.
26 posted on 09/07/2011 12:01:49 AM PDT by tdscpa
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To: Colonel Kangaroo
I agree. I am going to have to send estimated tax payments to the IRS and KDR in a week, and really don't want to pay $5.95 or $6.95 each, whichever is the minimum charge to UPS or FedEx deliver my quarterly income tax payments.
27 posted on 09/07/2011 12:11:35 AM PDT by tdscpa
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