Postal Liabilities $10 Billion Less Than Assumed, OIG Reports

OIG Report - Liabilities
With $72 billion in revenue and 154 billion pieces of mail moved in a year, the U.S. Postal Service deals in the billions. That’s why you sometimes hear people joke that “a few million here and a few million there and pretty soon you are talking about real money” with the USPS.

But even for the Postal Service, unfunded liabilities — or future payment obligations for health and pension benefits — totaling about $73 billion is big money that has a huge impact on its long-term health. Hence, postal reform legislation over the years has included provisions that address the Postal Service’s health and retiree liabilities.

How those liabilities are measured has been the source of much debate in the postal community because of the assumptions used — such as interest rates and demographic inputs — to calculate the future costs. Our recent audit report looked at the impact of changes in assumptions on Postal Service retirement liabilities and found that by using Postal Service-specific demographic and economic assumptions, the overall liabilities decreased by $10.2 billion. (Click to read report)