You may have heard that the U.S. Postal Service “found” $27 billion. Besides hoping a similar windfall comes your way, you might wonder: Where did they find it and how did this happen?
If you would have suggested a month ago that marketers would be able to develop their fiscal ’03, ’04, ’05 and ’06 mailing plans without having to think about a postal rate increase, people would have thought you were off your rocker. Those of us in the postal trenches were focused on the challenge to continue postal productivity gains, reform legislation and the need for a presidential commission. Here are the facts.
The federal bureaucracy known as the postal service has aspects similar to businesses in the private sector. As an accrual-accounting enterprise, the USPS must contribute to employee retirement programs to provide necessary cash for when actual retirement costs are incurred. A significant amount of general cost over the last several years has been funding retirement for the portion of postal employees covered by the Civil Service Retirement System (CSRS). Recently, this system has been replaced by a more contemporary plan, but a significant number of retirees and long-term current employees are under the legacy plan’s responsibility.
Please consider that because the postal service is part of the federal government (as is the CSRS), the last analysis for funding requirements was done in 1971