Postal service watchdog says retirement reserves already are ‘astonishingly high’

For immediate release
Feb. 1, 2012
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Michael Briggs (202) 224-5141
WASHINGTON, Feb. 6 – At a time when the U.S. Postal Service is considering deep cuts in services and jobs, an internal watchdog today told Sen. Bernie Sanders (I-Vt.) that a big funding cushion already has been built into the mail service’s retirement and health benefit funds.
Billions of dollars owed to the funds have been cited by Postal Service managers as a main reason that it must cut 220,000 jobs and close 3,700 post offices and 252 mail processing plants – half of all the current sorting centers.
In a letter to Sanders, however, Postal Service Inspector General David C. Williams said the programs are flush with funds. He said the Postal Service has “significantly exceeded” the amount that the federal government and the nation’s most profitable corporations have socked away for pension and retiree health care. “Using ratepayer funds, it has built a war chest of over $326 billion to address its future liabilities,” Williams told Sanders.
Sens. Patrick Leahy (D-Vt.) and Mary Landrieu (D-La.) joined Sanders a Capitol Hill press conference.
Armed with the new information from the inspector general, Sanders said the Postal Service should be released from what he called an “onerous and unprecedented burden” of being forced to put $5.5 billion every year into their future retiree health benefits fund.  Even if there are no further contributions from the post office, and if the fund simply collects 3.5 to 4 percent interest every year, that account will be fully funded in 21 years, Sanders said.  He also said the Postal Service should be allowed to recover more than $13 billion in overpayments it has made to a federal retirement systems.
Even with those changes, Sanders said the Postal Service needs reforms to make it competitive in the e-mail era.
“Let’s be clear: these short-term accounting efforts will not solve the long-term financial problems facing the U.S. Postal Service.  In order to do that, the Postal Service needs to adopt an entirely new business model which makes it much more entrepreneurial, pro-business, and pro-consumer compared to where it is today,” Sanders said.
He wants a blue ribbon commission to give the Postal Service ideas about how it can substantially increase revenue by offering far more services than today.
To read a copy of the inspector general’s letter to Sanders, click here.

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