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.
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 USPSâ€™s current problems”. It would seem extremely unlikely that eliminating workers’ and retirees’ health benefits would be part of that resolution.