According to Postal Inspector General David Williams writing in the Federal Times, "Each year, before the Postal Service even opens its doors for business, it is saddled with paying a $7 billion-a-year overcharge for retiree health care - more than 10 percent of revenues. My office believes these $7 billion payments are erroneous and the result of exaggerated health care forecasting, excessive pre-funding levels for the retiree health care and pension funds, and an unfair transfer of federal pension obligations to the Postal Service. We believe the estimate of the Postal Service's future burden for retiree health care has been exaggerated because the government has assumed a health care forecast 2 percent higher than the industry standard. Secondly, the Postal Service is currently required to fund 100 percent of its retiree health and pension obligations - more than the standard 80 percent pension funding levels found in the Standard & Poor's 500 and the federal government's own funding level of 41 percent. Lastly, by our calculation, the Postal Service has been overcharged $75 billion for its pension obligations. When the Post Office Department became the Postal Service in 1971, employees who belonged to the federal pension fund started contributing to the Postal Service."
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April 18 2010 04:20 PM
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