The USPS Office of Inspector General (OIG) says U.S. Postal Service’s requirement to prefund its long-term pension and healthcare liabilities doesn’t seem quite right. And it issued a report describing why it thinks so.
In a recent blog post, the USPS OIG compared the prefunding requirement to a credit card company telling a consumer they would have to enclose a million dollars in their next bill payment because it’s the responsible thing to do.
In the report, with the unexciting title, “Considerations in Structuring Estimated Liabilities,” it outlines in detail some of the numbers surrounding the issue.
The Postal Service is required to pay the full estimate of its liabilities, currently estimated at nearly $404 billion, according to the OIG, while the Postal Service has set-aside cash totals of more than $335 billion for its pensions and retiree healthcare, exceeding 83 percent of estimated future payouts.
“Our paper details how different assumptions and considerations would affect the liabilities,” it wrote. “Basically, if the Postal Service’s real estate assets were considered and one other assumption adjusted, the long-term liabilities would be overfunded.”
It then solicited feedback in the comments section of its blog.