The U.S. Office of Personnel Management (OPM) watchdog is objecting to the recommendations the U.S. Postal Service watchdog has made regarding retiree benefits trust funds.
The U.S. Postal Service Office of Inspector General (OIG) says the postal service has contributed $142 billion too much to the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Funds and could put those excess contributions to better use.
The OPM Office of the Inspector General says the postal service has contributed the right amount and ought to leave the trust funds alone. Taking money out would hurt federal retiree benefits programs without doing much to help long-term postal service profitability, OPM OIG officials say.
The postal service was a government department until 1971. Congress then made the service a stand-alone corporations that was supposed to be self-supporting entity.
Volume and revenue grew in the 1980s and 1990s, but the recession and the rise of the Internet have hurt revenue in the past few years, and the postal service now has 596,000 career employees, down from about 700,000 10 years ago.
The postal service reported a $329 million net loss for the first quarter of federal fiscal year 2011 on $18 billion in revenue, compared with a net loss of $297 million on $18 billion in revenue for the fourth quarter of fiscal year 2010.
Federal fiscal year 2011 started Oct. 1, 2010.
Net results for the latest quarter include a $2 billion retiree health benefits pre-funding contribution.
Projections show that the service will be out of cash by Sept. 30 and that it will have used up its statutory borrowing capacity.
Postmaster General Patrick Donahoe said in December 2010 at a Senate subcommittee hearing that a federal law enacted when the economy was strong requires the postal service to pre-fund
future retiree health benefits on a 10-year schedule.
“No other federal agency or private sector companies have a similar burden,” Donohoe said.