White paper on retiree funds......OIG spells out truth on prefunding.

klutz

New member
OIG FT-WP-17-001   Postal Service Retiree Funds Investment Strategy.  OIG asked some hotshots to look into getting a better return on both retirement funds and the prefunding account for healthcare.

1.   Compared to just about every corporation in the US USPS is in great shape on unfunded balances ( shortfall in putting away money for future benefits).

CSRS is 91 % funded, FERS is 97% funded and Prepaid healthcare is at 50%.  Most corps and states and municipalities would be lucky to be anywhere close to these figures.

2. Hotshot consultants say they can increase rates by putting $$ into riskier investments....Sure....The consultants say usps is not getting a good return because the treasury bills aren't getting a good return.....UMMM? Ya think all rates of return turned south when Wall Street destroyed our economy while making themselves rich? And usps wants to put $$$$ in these guys hands?     **********Conspiracy theorists would say this is the beginning of Wall Street trying to get into our money.

3.  Treasury Department probably would never go along with the idea.....Why ?.......When Congress fails to vote a new budget, the Treasury says we can keep the government going for a while....How ?  The 338.4 billion of assets for our retirements is "borrowed' to keep the balance sheets balanced.

 

AND BEST OF ALL. On Page 6...OIG spells out clearly that the Postal Accountability Act which mandated the huge prepayments for healthcare was a farce.

Quote: " In addition to moving $20 billion from the CSRS surplus ($17 billion) and an escrow account ($3 billion) to the newly established PSRHBF, the PAEA included a pre-funding schedule to build the funds's assets in transition to leaving the pay as you go system......These payments, which totaled $55.8 billion, were not actuarially based..."

Translation: When they took the 20 billion and 3 billion and also unbundled retirement liability of military/usps employees this caused an accounting problem.

If they didn't have anything to offset the dollars, the Congress would look stupid with a 50 billion dollar loss.  So...the game was to say USPS would prefund 50 billion in healthcare.....The two wash and the $50 billion deficit magically disappears.  

When OIG says These payments...$55.8 billion...were no actuarially based.....OIG says these numbers were MADE UP...

And now you know some of the behind the scenes shenanigans inflicted on us and our customers by Congress and a long stretch of USPS management.
 

D.B.Cooper

Active member
Smoke and mirrors... it's how it's all done... <img title="Surprised" alt="Surprised" src="https://www.ruralmailtalk.ruralinfo.net/wp-content/sp-resources/forum-smileys/sf-surprised.gif" />

I would have loved to have been a fly on the wall when some of the backroom deals like PAEA were made... Hey Donahoe, I'm gonna bump your annual salary up above every Cabinet Secretary in the US, and give you a golden parachute retirement plan, and all it'll cost you is 5 or 6 BILLION $$$ in what we're gonna call "retirement prefunding"... it'll be great, and these suckers will never catch on....  Donahoe:  Yeah, but we're probably gonna have to cut back PO hours and ratchet down workers pay to do this... <img title="Confused" alt="Confused" src="https://www.ruralmailtalk.ruralinfo.net/wp-content/sp-resources/forum-smileys/sf-confused.gif" /> Okay, sounds good... let's do it...  <img title="Surprised" alt="Surprised" src="https://www.ruralmailtalk.ruralinfo.net/wp-content/sp-resources/forum-smileys/sf-surprised.gif" />

http://www.apwu.org/news/web-news-article/real-story-about-uspss-finance

<em>"...The claim that the USPS lost over $5 billion in the last fiscal year buries the truth. In 2006, Congress passed the Postal Accountability Enhancement Act (PAEA). PAEA mandated, to the tune of $5 billion a year for a decade, that future retiree health benefit liabilities be funded at 100 percent, 75 years into the future.  No other employer, public or private, is forced to meet this unfair standard.</em>

<em>If this unreasonable burden is excluded, the USPS, which operates without tax dollars, has operating profits totaling $3.2 billion since 2013. Package volume in 2016 grew an incredible 15.8 percent year to date. The explosion of e-commerce has made USPS even more of a national treasure..."</em>

Why does the NRLCA never expose the negatives about how we're being screwed???  <img title="Confused" alt="Confused" src="https://www.ruralmailtalk.ruralinfo.net/wp-content/sp-resources/forum-smileys/sf-confused.gif" />
 
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