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The U.S. Postal Service continues to experience financial challenges and operated at a $5 billion deficit in fiscal year (FY) 2013. The Postal Service remains a labor-intensive organization; it incurred about $47 billion in compensation and benefits expenses in FY 2013, including about $6 billion for retirement benefits. In its 2013 Annual Plan, the Postal Service said it needs to create a new retirement plan for future employees as part of its efforts to gain control over personnel costs.

At the request of the Postal Service, we benchmarked its retirement benefits against six private and two government sector programs. …

Conclusion
Pensions, which were originally intended to attract and retain talented employees, are a major cost to organizations and may be less important as workers become more mobile and transient throughout their careers. Pension payments are becoming larger as the retirement window continues to grow with increasing life expectancy. In a volatile economy, many organizations are unable to meet their promised pension payments as they struggle to maintain an adequate rate of return on their assets. However, many unions and employees still demand a pension plan. Many organizations are adjusting their retirement benefits programs to cater to an evolving workforce while alleviating long-term retirement costs. …

We identified common practices involving cost-savings, governance and administration, union negotiation and relations, and employee satisfaction strategies. The Postal Service should consider these practices, used by the organizations we examined, if it changes its retirement benefits.

via Office of Inspector General | United States Postal Service.