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OPM OIG Study of USPS OIG Proposals Feb 28 2011

OPM OIG Study of USPS OIG Proposals Feb 28 2011

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Published by: House Oversight Committee on Aug 10, 2011
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08/17/2011

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u.s.
OFFI
CE
OF
PERSONNEl
MANAGEMENT 
OFFICE
OF
THE INSPECTOR
GENERAL 
A Study
of
the Risks and Consequencesof the USPS
OIG's
Proposals to ChangeUSPS's Funding
of
Retiree Benefits
Shifting Costs from USPS Ratepayers to Taxpayers 
 
Page Intentionally Left Blank
 
OPM OFFICE OFTHE INSPECTORGENERAL
FEBRUARY
20
11 
I
EXECUTIVE SUMMARY
L
A STUDY
OF
THE
RISKS
AND
CONSEQ!JENCES 
OF
THE
USPSOLG
s PROPOSALS
TO CHANGE 
USPS
S
FUNDING OF
RETIREE BENEFITS 
SHIFTING
COSTS FROM
USPS
RATEPAYERS
TO
TAXPAYERS
One
of
thep
ri
nc
ip
alrespons
ib
ili
ti
es
of
th
e U.S.Office
of
PersonnelManagement(O
PM
)
is
theadministration
of
th
ebenefitsprograms forFederalciv
ili
anem
pl
oyees andret
ir
ees. Aspart
of
thatduty.
it
manages andoversees
th
e Ci
vi
lServiceRetireme
nt
and
Di
sability(CSRD) Fund, thePostalServiceRetireeHealthBenefits(PSRHB) Fund,and the
Em
pl
oyeesHealth Benefits
(E
HB
)
Fund.
TheUnitedStatesPostalService(USPS)was established
in
1971
,replac
in
g
th
e former U.S.Post OfficeDepartment(POD). Unlikeitspredecessor,the
US
PSis an independentestablishment oftheExecutiveBranchratherthanaFederal agency.Thisdecision to transfo
rm
thePODwas influencedby
th
e factthatitoffered whatwere essentially
com
mercial
se
rvicesandthus could beexpectedtoprodu
ce
the revenues tocoverits owncostsrather
thanre
l
yi
nguponannual Governmentappropriations.
In
2009 and 2010,the
US
PSOffice
of
In
spectorGeneral(USPS
01
0)
issued a series
of
re
po
rt
scon
ta
in
ingproposals
th
at wo
ul
d reduce,modify,or eli
mi
na
te
th
elega
ll
y-mandatedpayments that
th
e
US
PS curre
ntl
ymakesintothe OPM-administeredt
ru
stfunds. Thesereportsmakethe general arg
um
e
nt
that
th
ebasicgoal
of
each
of
theseproposalsistwo-fold:
(I)
to
remedyana
ll
egedinequityinthecur
rent
method byw
hi
chthe
US
PS fundsitsretiree obligations (both
an
nuity andretireehealthbenefits)a
nd
(2)toobtainoper
at
in
g capi
tal
for
th
e USPS,atleastona temporary basis.
The
US
PS
OIG's
Proposal
Proposal
1;
Treatment
of
FERS Surplus
.Thisproposal wouldchange
th
elawregardingan agency's (
ill
thi
s case,the USPS's) contributionstotheCSRDFundmadeunder
th
eFederalEmployeesRetirementSystem(FERS)so
th
at when
th
eagencyhaspaid anamount
in
excess
of
itscurrentliabi
li
ties,
it
may eitherreceivearebate
0
1'
beexcusedfrommaking contributionsuntil the excessis exhausted.

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