January 6, 2017

Government to reduce USPS pension liability

Long on the list of must-haves by the USPS has been a re-valuation of its retirement liabilities based on its own employees’ demographics rather than those of the full government workforce. The Proposed Rule was issued by the Office of Personnel Management (OPM) on December 22, and comments are dues by February 21.

The USPS believes its demographics will yield lower liabilities and thereby reduce the need for postage increases. They also would like to have OPM employ USPS-specific economic assumptions because they believe the Postal service has done a better job of controlling labor costs than the federal government at large. Lower wage growth means lower future pension costs. USPS is likely to push for the inclusion of economic assumptions along with demographic, with the support of unions and customers.