USPS pension surplus looks much smaller than originally thought

By Eric Katz

November 14, 2012

The U.S. Postal Service has repeatedly pointed to an $11 billion surplus in its pension funds as a key to returning the agency to solvency.

As it turns out, the surplus might be much smaller than projected.

The Office of Personnel Management Direct John Berry said in a letter to Postmaster General Patrick Donahue that the surplus is closer to $2.6 billion due to lower interest rates, Bloomberg Businessweek has reported.

The surplus comes from the USPS payments into the Federal Employee Retirement System. The projected excess was reduced after actuaries recommended cutting long-term interest rates from 5.75 percent to 5.25 percent.

The USPS inspector general found in a recent report the surplus was created due to the growing gap between the salary of the average postal worker and the salaries of other federal employees.

The National Association of Letter Carriers has previously said the Postal Service should use its surplus -- then estimated at $11 billion -- to pay for changes needed at the agency.  

By Eric Katz

November 14, 2012

http://www.govexec.com/management/2012/11/usps-pension-surplus-looks-much-smaller-originally-thought/59524/