Could postal workers and retirees lose their health benefits?

Alan Robinson wrote this about the OPM Inspector General’s report on USPS financial relief earlier today:

The OPM-OIG Report, entitled, "A Study of the Risks and Consequences of the USPS OIG’s Proposals to Change USPS’s Funding of Retiree Benefits," suggests Postal employees could lose their retiree health benefits if the Postal Service cannot make its statutorily required payments to the Employee Health Benefit (EHB) Fund. They even seem to imply that current employees could lose their health benefits.

via Courier, Express, and Postal Observer.

The post highlights some scary language in the OPM report, which discusses the possibility that at some time in the future, the USPS could default on its obligations to pay for its then-current employees and retirees. Alan has added some comments I sent him in reply to an email in which he suggested that this could happen “this fall”. That’s not going to happen- let me clarify what I said:

  • The EHB fund referred to in the report is the fund for current federal employees’ and retirees’ health benefits. The OPM presents scenarios that could occur if, at some unspecified future date, the USPS was unable to meet its obligations to the fund. The USPS has not indicated that such a possibility is imminent, and it certainly doesn’t seem likely to happen in the next few years.
  • What IS likely to happen this year is that the USPS will be unable to make its required payment into the future retiree health benefits trust fund (PSRHB). That’s the fund set up by PAEA in 2006, which was intended to be used to satisfy future retirees’ health benefit obligations beginning in 2017. Failure to make that payment would have no immediate effect on current postal workers’ and retirees’ benefits.
  • The OPM report appears to take the position that in the absence of a realistic blueprint for attaining profitability on the part of the USPS, it must base its recommendations on the worst case scenario, i.e. the service’s near term insolvency, in order to protect the taxpayers.
  • The OPM IG has some serious disagreements with the USPS IG’s recommendations, but says : “we think that our work, combined with theirs, will help the Congress, the Administration, and the USPS to develop the most efficient and effective resolution of the USPS’s current problems”. It would seem extremely unlikely that eliminating workers’ and retirees’ health benefits would be part of that resolution.
  • Disgusted with the Government

    Another scare tactic I would guess. I was going to retire this year to help cut back the number of employees for the Postal Service. I will have to keep working in order to pay for health care. I am sure I will not be alone. I hear they want to cut back employee numbers by 200,000 people. That will not happen now.

  • NICK

    government never intended on returning the 75 billion in over payments.
    it is the same with the social security trust fund. the 3 trillion in over payments will never be returned.

  • brian

    3 trillion? I thought it was eleventy-seven gazillion.

  • trout

    I keep saying…keep voting for Republiclowns……….
    as for this….I guess it’s another well thought out strategy by the rocket scientists in DC


    Couple the gazillion dollar derivative trojan horse, with quantitative easing (printing/devaluing dollars), fed and state cumulative pension bubbles, rising energy and food prices, and rage in northern africa/mid-east, three military occupations, plus another season of “The View”, mabye 200,000 lost jobs for usps is optiminstic?

  • M. Jamison

    The OPM/OIG scenario relies on treating the Postal Service as a private business with stockholders. Under that construct the idea of a bankruptcy with an abandonment of pension and health care obligations might be a possble. It appears that the OPM came up with this disingenuous argument as a means of having their cake and eating it too.
    The Postal Service pays into the FERS and CSRS retirement trust funds and any amount of excess payments not only makes the current budget deficit look smaller but it also makes the actuarial deficiencies that exist for the rest of the Federal retirement system look smaller.
    OPM is playing an accounting shell game. There are probably political reasons for that but OPM may have also made the calculation that there is some likelihood of postal privatization in the future. They are perhaps setting the stage for the accounting for retiree pensions and benefits under that circumstance.
    This is agency gamesmanship which is at best unhelpful but in the current environment it may be downright dangerous. There are folks in Washington who are losing sight of the practical for the pragmatic and in doing so they may be playing fast and loose with the words, “full faith and credit of the US.”
    Should the meaning of that term become hollow the Great Depression will look minor compared to the economic consequences that will follow.

  • manipulated


  • Ralf

    Cut overhead….Lose Managerial dead weight. We are so top heavy with wanna be CEOs it’s sickening.

  • bob

    Let me ask a dumb arse question…. Who funds the future retirement & health benefits of Congress,(they seem to live alot longer then Postal Workers) and did Potters big bonus he got when he left come out of the retirement fund ?