The Institute for Research on the Economics Of Taxation (IRET.org) prepared the following paper on the issue of overcharging USPS $75 Billion in Pension costs.
The Postal Service Office of Inspector General (OIG) released a study in January 2010 claiming the Postal Service is entitled to $75 billion from the U.S. Treasury. The Postal OIG alleges that the U.S. Office of Personnel Management (OPM), acting as the federal government’s agent, has overcharged the Postal Service $75 billion in pension costs since the 1970s. With postal pensions already well funded, the Postal OIG proposes using most of the money to support an entirely different fringe benefit: underfunded postal retiree health care. The proposed transfer would increase the burden on the U.S. Treasury and taxpayers.
At issue is how the Postal Service and U.S. Treasury should have divided the Civil Service Retirement System (CSRS) pension costs of early postal employees who had worked before July 1971 at the old Post Office Department. The Postal OIG claims its approach is required by fairness and the law.
This paper reviews the history of the allocation question, including relevant legislation, and presents the conflicting positions.The paper then examines the subjective concept of fairness and finds strengths and weaknesses on both sides.