{"id":88362,"date":"2024-01-08T18:52:55","date_gmt":"2024-01-08T23:52:55","guid":{"rendered":"https:\/\/www.21cpw.com\/?p=88362"},"modified":"2024-01-09T20:11:03","modified_gmt":"2024-01-10T01:11:03","slug":"postal-retirement-funds-in-perspective-historical-evolution-and-ongoing-challenges","status":"publish","type":"post","link":"https:\/\/www.21cpw.com\/postal-retirement-funds-in-perspective-historical-evolution-and-ongoing-challenges\/","title":{"rendered":"Postal Retirement Funds in Perspective: Historical Evolution and Ongoing Challenges"},"content":{"rendered":"<div class=\"wp-socializer wpsr-share-icons\" data-lg-action=\"show\" data-sm-action=\"show\" data-sm-width=\"768\" data-ga=\"share_icons\" data-ga-action=\"share\"><div class=\"wpsr-si-inner\"><div class=\"socializer sr-popup sr-fluid sr-32px sr-opacity sr-pad\"><span class=\"sr-facebook\"><a data-id=\"facebook\" style=\"color:#ffffff;\" rel=\"nofollow\" href=\"https:\/\/www.facebook.com\/share.php?u=\" target=\"_blank\" title=\"Share this on Facebook\"><i class=\"fab fa-facebook-f\"><\/i><\/a><\/span>\n<span class=\"sr-twitter\"><a data-id=\"twitter\" style=\"color:#ffffff;\" rel=\"nofollow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=%20-%20%20\" target=\"_blank\" title=\"Tweet this !\"><i class=\"fab fa-twitter\"><\/i><\/a><\/span>\n<span class=\"sr-share-menu\"><a href=\"#\" target=\"_blank\" title=\"More share links\" style=\"color:#ffffff;\" data-metadata=\"{&quot;url&quot;:&quot;&quot;,&quot;title&quot;:&quot;&quot;,&quot;excerpt&quot;:&quot;&quot;,&quot;image&quot;:&quot;&quot;,&quot;short-url&quot;:&quot;&quot;,&quot;rss-url&quot;:&quot;https:\\\/\\\/www.21cpw.com\\\/feed\\\/&quot;,&quot;comments-section&quot;:&quot;comments&quot;,&quot;raw-url&quot;:null,&quot;twitter-username&quot;:&quot;&quot;,&quot;fb-app-id&quot;:&quot;&quot;,&quot;fb-app-secret&quot;:&quot;&quot;}\"><i class=\"fa fa-plus\"><\/i><\/a><\/span><\/div><\/div><\/div><p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-88364\" src=\"https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/oig-postal-retirement-funds.jpg\" alt=\"\" width=\"771\" height=\"618\" srcset=\"https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/oig-postal-retirement-funds.jpg 771w, https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/oig-postal-retirement-funds-300x240.jpg 300w, https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/oig-postal-retirement-funds-768x616.jpg 768w\" sizes=\"(max-width: 771px) 100vw, 771px\" \/><\/p>\n<blockquote>\n<ul>\n<li><strong>Retirement-related costs were 11.7 percent of operating expenses in FY 2023, a significant cost for the Postal Service.<\/strong><\/li>\n<li><strong>USPS has higher retirement liabilities than other agencies and must pay these costs through revenue rather than through congressional appropriations. The Postal Service has no control over levers that might decrease costs or generate higher fund balances.<\/strong><\/li>\n<li><strong>Recent high inflation had several impacts on USPS\u2019s retirement funds, including a significant increase in amortization payments and higher-than-average cost-of-living adjustments for retirees.<\/strong><\/li>\n<li><span style=\"background-color: #ffff00;\"><strong>The Postal Service Retiree Health Benefits Fund is expected to be depleted in FY 2031. At that time, retirement-related costs will increase dramatically. Retirement costs are expected to be nearly $18 billion in FY 2032.<\/strong><\/span><\/li>\n<li><strong>Increasing retirement costs can divert money away from necessary capital investments, such as improvements to the retail and delivery network.<\/strong><\/li>\n<\/ul>\n<p>Since the formation of the modern Postal Service in 1971, various laws gave it more retirement liability than other federal agencies. As an independent agency within the federal government, USPS is expected to be self-sustaining and cover costs \u2014 including retirement costs \u2014 through revenue. Thus, while other federal agencies receive annual congressional appropriations to fund retiree pension and health care benefits, the Postal Service generally receives no direct tax dollars and pays for these expenses from the sale of postal products and services. USPS\u2019s retirement costs are significant \u2014 $10 billion in FY 2023 alone.<\/p>\n<p>For employees who worked for both the Post Office Department (the cabinet-level agency that existed until 1971) and the Postal Service, USPS shares retirement obligations with the federal government. However, the allocation methodology used by the Office of Personnel Management (OPM) places a disproportionate share of CSRS liability on the Postal Service. Prior OIG work estimated USPS\u2019s CSRS balance would be $80 to $111 billion larger using an alternative allocation methodology. As part of its Delivering for America plan, the Postal Service is seeking administrative action to correct its CSRS overpayment.<\/p>\n<p>Recent high inflation impacted USPS\u2019s retirement funds in several ways. First, the rate of inflation exceeded the interest rate on the funds, resulting in a negative real return on investment. Second, high inflation led to higher-than-average cost-of-living adjustments for retirees. Finally, inflation resulted in significant increases to CSRS and FERS amortization payments.<\/p>\n<p>Currently, USPS does not have any annual costs related to retiree health care. The Postal Service Retiree Health Benefits Fund (PSRHBF) is expected to be depleted in FY 2031. When the fund is depleted, the Postal Service will need to pay retiree health premiums directly from annual revenue. Total retirement-related costs are expected to grow to nearly $18 billion by FY 2032, due in large part to the depletion of the PSRHBF.<\/p>\n<p>Rising retirement costs can divert money away from capital investments, such as improvements to the Postal Service\u2019s vast retail and delivery network. Increasing retirement costs may also result in higher rate increases for both competitive and market dominant products. Stakeholders and policymakers should consider potential strategies to mitigate future costs, such as diversification of retirement investments and CSRS reform.<\/p><\/blockquote>\n<p><a href=\"https:\/\/stories.uspsoig.gov\/postal-retirement-funds-in-perspective-historical-evolution-and-ongoing-challenges\/index.html\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-88368 size-full\" src=\"https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/postalretirementfunds_in_perspective.jpg\" alt=\"\" width=\"480\" height=\"360\" srcset=\"https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/postalretirementfunds_in_perspective.jpg 480w, https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/postalretirementfunds_in_perspective-300x225.jpg 300w\" sizes=\"(max-width: 480px) 100vw, 480px\" \/><\/a><\/p>\n<h4><a href=\"https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/risc-wp-24-002-retirement-funds-oig.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"color: #0000ff;\">Read full report:<\/span><\/a><\/h4>\n<div class=\"ead-document\"><iframe src=\"\/\/docs.google.com\/viewer?url=https%3A%2F%2Fwww.21cpw.com%2Fwp-content%2Fuploads%2F2024%2F01%2Frisc-wp-24-002-retirement-funds-oig.pdf&embedded=true&hl=en\" style=\"width:100%; height:500px; border: none;\"><\/iframe><p class=\"embed_download\"><a href=\"https:\/\/www.21cpw.com\/wp-content\/uploads\/2024\/01\/risc-wp-24-002-retirement-funds-oig.pdf\" download >Download [5.62 MB] <\/a><\/p><\/div>\n<h5>Related Content<\/h5>\n<p><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" title=\"Historical Analysis of USPS Retirement Fund Returns\" href=\"https:\/\/www.uspsoig.gov\/reports\/white-papers\/historical-analysis-usps-retirement-fund-returns\" target=\"_blank\" rel=\"nofollow noopener\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"f19972c4-ea4a-4dee-9d3b-180fc27fdc96\">Historical Analysis of USPS Retirement Fund Returns<\/a><\/span><\/p>\n<p><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" title=\"Postal Service Investment and Interest Rate Risk\" href=\"https:\/\/www.uspsoig.gov\/reports\/audit-reports\/postal-service-investment-and-interest-rate-risk\" target=\"_blank\" rel=\"nofollow noopener\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"374a2444-4260-4830-9bef-5ff488418ce5\">Postal Service Investment and Interest Rate Risk<\/a><\/span><\/p>\n<p><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" title=\"Options to Reduce Unfunded Retirement Liabilities\" href=\"https:\/\/www.uspsoig.gov\/reports\/audit-reports\/options-reduce-unfunded-retirement-liabilities\" target=\"_blank\" rel=\"nofollow noopener\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"10e9a3bb-2430-4358-8daf-5f03d4152e63\">Options to Reduce Unfunded Retirement Liabilities<\/a><\/span><\/p>\n<p><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" title=\"Treasury Inflation-Protected Securities\" href=\"https:\/\/www.uspsoig.gov\/reports\/audit-reports\/treasury-inflation-protected-securities\" target=\"_blank\" rel=\"nofollow noopener\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"91827725-f430-47ed-9510-23a70e0cbd9f\">Treasury Inflation-Protected Securities<\/a><\/span><\/p>\n<p><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" title=\"Foreign Posts\u2019 Retirement Asset Investments\" href=\"https:\/\/www.uspsoig.gov\/reports\/white-papers\/foreign-posts-retirement-asset-investments\" target=\"_blank\" rel=\"nofollow noopener\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"a20349dd-e8f5-4e37-9910-da2f44886974\">Foreign Posts\u2019 Retirement Asset Investments<\/a><\/span><\/p>\n<p><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" title=\"Postal Service Retiree Funds Investment Strategies\" href=\"https:\/\/www.uspsoig.gov\/reports\/white-papers\/postal-service-retiree-funds-investment-strategies\" target=\"_blank\" rel=\"nofollow noopener\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"d4b6a7ff-732f-41ef-9f68-f02392206a40\">Postal Service Retiree Funds Investment Strategies<\/a><\/span><\/p>\n<p><span style=\"color: #0000ff;\"><a style=\"color: #0000ff;\" title=\"Update for Measuring Pension and Retiree Health Benefits Liabilities\" href=\"https:\/\/www.uspsoig.gov\/reports\/audit-reports\/update-measuring-pension-and-retiree-health-benefits-liabilities\" target=\"_blank\" rel=\"nofollow noopener\" data-entity-substitution=\"canonical\" data-entity-type=\"node\" data-entity-uuid=\"bb3607dc-03b5-466e-b532-7d24844014dc\">Update for Measuring Pension and Retiree Health Benefits Liabilities<\/a><\/span><\/p>\n<hr \/>\n<p><span style=\"font-size: 12px;\"><em>Joy Sanzone, David Neu, and John Althen contributed to this report.<\/em><\/span><\/p>\n<p>Source: <a href=\"https:\/\/www.uspsoig.gov\/\" target=\"_blank\" rel=\"noopener\"><em>USPS OIG<\/em><\/a><\/p>\n<div class=\"wp-socializer wpsr-share-icons\" data-lg-action=\"show\" data-sm-action=\"show\" data-sm-width=\"768\" data-ga=\"share_icons\" data-ga-action=\"share\"><div class=\"wpsr-si-inner\"><div class=\"socializer sr-popup sr-fluid sr-32px sr-opacity sr-pad\"><span class=\"sr-facebook\"><a data-id=\"facebook\" style=\"color:#ffffff;\" rel=\"nofollow\" href=\"https:\/\/www.facebook.com\/share.php?u=\" target=\"_blank\" title=\"Share this on Facebook\"><i class=\"fab fa-facebook-f\"><\/i><\/a><\/span>\n<span class=\"sr-twitter\"><a data-id=\"twitter\" style=\"color:#ffffff;\" rel=\"nofollow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=%20-%20%20\" target=\"_blank\" title=\"Tweet this !\"><i class=\"fab fa-twitter\"><\/i><\/a><\/span>\n<span class=\"sr-share-menu\"><a href=\"#\" target=\"_blank\" title=\"More share links\" style=\"color:#ffffff;\" data-metadata=\"{&quot;url&quot;:&quot;&quot;,&quot;title&quot;:&quot;&quot;,&quot;excerpt&quot;:&quot;&quot;,&quot;image&quot;:&quot;&quot;,&quot;short-url&quot;:&quot;&quot;,&quot;rss-url&quot;:&quot;https:\\\/\\\/www.21cpw.com\\\/feed\\\/&quot;,&quot;comments-section&quot;:&quot;comments&quot;,&quot;raw-url&quot;:null,&quot;twitter-username&quot;:&quot;&quot;,&quot;fb-app-id&quot;:&quot;&quot;,&quot;fb-app-secret&quot;:&quot;&quot;}\"><i class=\"fa fa-plus\"><\/i><\/a><\/span><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>Retirement-related costs were 11.7 percent of operating expenses in FY 2023, a significant cost for the Postal Service. USPS has higher retirement liabilities than other agencies and must pay these costs through revenue rather than through congressional appropriations. The Postal Service has no control over levers that might decrease costs or generate higher fund balances&#8230;.<\/p>\n<p><a href=\"https:\/\/www.21cpw.com\/postal-retirement-funds-in-perspective-historical-evolution-and-ongoing-challenges\/\"><span class=\"glyphicon glyphicon-arrow-right\"><\/span>&nbsp;Continue reading<\/a><\/p>","protected":false},"author":225,"featured_media":88364,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,172,176],"tags":[2578,22692,290,24347,12622,12417,15751,24348,7516],"_links":{"self":[{"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/posts\/88362"}],"collection":[{"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/users\/225"}],"replies":[{"embeddable":true,"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/comments?post=88362"}],"version-history":[{"count":10,"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/posts\/88362\/revisions"}],"predecessor-version":[{"id":88375,"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/posts\/88362\/revisions\/88375"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/media\/88364"}],"wp:attachment":[{"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/media?parent=88362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/categories?post=88362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.21cpw.com\/wp-json\/wp\/v2\/tags?post=88362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}