Study: Postal Service overpaid retirement fund by $50B

An independent study authorized by the Postal Regulatory Commission has found that the financially struggling US Postal Service has overpaid its Civil Service Retirement System benefits by at least $50 billion. The PRC authorized The Segal Company, an actuarial and consulting firm, to prepare the report on possible USPS overcharges. The inquiry found that “an adjustment of $50 billion to $55 billion would be equitable.” The Office of Personnel Management, which is responsible for calculating the USPS' pension liability, must reconsider its calculation of the Postal Service's pension assets in light of the report, according to the PRC. OPM must then submit those results to the PRC, the Postal Service and Congress, the PRC said. The PRC also suggested that Congress could alter the schedule for potential transfers from the Postal Service Retirement Fund to its Retiree Health Benefit Fund. Source: DMNews

"I'm as mad as hell, and I'm not going to take this anymore!!"

The unprecedented nature of the US Postal Service's forthcoming “exigent” rate case is uniting the business mailing community in a way few other issues have. Mailing groups across a wide spectrum of the industry are forming a coalition to fight the Postal Service's first-ever exigent price increase, Jerry Cerasale, the Direct Marketing Association's senior VP for government affairs, confirmed. The Postal Service is expected to file the exigent case with the Postal Regulatory Commission (PRC) on July 6. The coalition, which has not been named yet but some are informally calling the “Just say no coalition,” will include a broad base of postal customers. Sources say that every association with some interest or connection to mail has been invited to join the coalition. “It is not just the usual suspects,” Cerasale asserted, though he declined to name members until the coalition has officially announced itself. The coalition will challenge the Postal Service's premise that a weak economy constitutes a reason to invoke the exigency clause in the Postal Accountability and Enhancement Act (PAEA), which became law in 2006. The PAEA put a price cap on the Postal Service's market-dominant products, restricting price increases to the increase in the Consumer Price Index. With no inflation in 2009, the USPS could not raise rates across its mailing products in 2010. The law, however, includes an exigency provision, which allows the Postal Service to seek price increases in excess of the inflation-based cap for “extraordinary or exceptional circumstances.” Postal officials have said the recession and subsequent effect on mail volume and revenue justify the use of the exigency clause. Mailers, however, disagree — not only with the USPS' argument, but with the size and timing of the increase. While the USPS is not releasing details on the price increase in advance of its filing, many industry leaders expect the increases to be in the 5% to 10% range. The new prices are expected to take effect in January 2011. Source: DMNews

House Resolution Opposes Five-Day Delivery

Support is slowly growing for a resolution offered by Rep. Sam Graves (MO 6th) that opposes USPS plans to move to five-day mail delivery. Introduced last February 13 and referred to the House Committee on Oversight and Government Reform, H Res 173 expresses “the sense of the House of Representatives that the United States Postal Service should take all appropriate measures to ensure the continuation of 6-day mail delivery service.” Read the full text of the resolution here. In a related story, speaking before a house hearing on the Postal Service's financial problems and possible solutions in June, Rep. Jason Chaffetz of Utah said he would oppose elimination of Saturday mail service. Instead he wants the U.S. Postal Service to choose 12 days a year to halt delivery, likely saving hundreds of millions of dollars. Source: MFSA and ABM