NALC: Retiree Pre-Funding Costs USPS $3.1 Billion Of Its 2012 QTR 1 Financial Loss

Statement by Fredric Rolando, President of the National Association of Letter Carriers, on the USPS Financial Report for the First Quarter of FY 2012

NATIONAL ASSOCIATION OF LETTER CARRIERS LOGOWASHINGTON, Feb. 9, 2012 – Despite the headline on its press release, the U.S. Postal Service announced today a net operating profit of $200 million delivering the mail in the first quarter of FY 2012 – an impressive achievement given the current economy. (Postal Service Chief Financial Officer Joe Corbett announced this profit on a conference call with reporters today.)

As the USPS notes, its performance was boosted by record employee productivity and by “stronger-than expected holiday shopping activity, driven by strong growth in online merchandise sales” – up 7 percent over the first quarter of the previous year. That shows the potential for growth offered by the Internet.

The record productivity and the strong growth in the shipping business show that the Postal Service can be a successful organization if freed from the unwarranted and uniquely onerous pre-funding burden placed on it by Congress.

The operational profit turns into red ink only when an external factor unrelated to mail delivery is considered – the 2006 congressional mandate that requires the Postal Service to pre-fund its future retiree health benefits over the next 75 years within a decade. That, along with a non-cash actuarial adjustment to the Postal Service’s workers’ compensation costs, is entirely responsible for the $3.3 billion “loss.” The pre-funding alone accounts for $3.1 billion of the quarter’s “loss.”

These results reveal the need for Congress to remove the crushing burden of the pre-funding payments, which the USPS is compelled to make, as its press release notes, “at rates not assessed any other entity in the United States.”

7 thoughts on “NALC: Retiree Pre-Funding Costs USPS $3.1 Billion Of Its 2012 QTR 1 Financial Loss

  1. Here’s a better one.

    The USPS borrows money it didn’t need to, to fund pensions that are already over-funded.

    The USPS goes into debt, so the price of postage goes up.

    Then, the public is paying postage to the USPS in order to provide money to the US government that is put into the general fund.

    This results in the public paying extra money to the US Government by paying too much for postage!

    Thus we see Congress letting the USPS become the CASH COW it always was before the reorganization.

  2. An old accounting trick was to borrow from the company’s pension fund by simply not funding it completely.

    The opposite of this trick would be to hide money by overfunding those funds.

    The reason for doing so is to hide money from the unions.
    and here, we have the PO putting billions into these funds.

    End result?

    Billions hidden from the unions, while not affecting the actual solvency of the company at all.
    The company can always get it back by under-funding the plan later.

    In the meantime, they look like they are billions in debt, when they aren’t.

  3. As usual not a peep out of NALC regarding the two most pressing issues for carriers:(1) the FERS retirement Destruction Bills in Congress right now that are authored by the republicans and (2) the Early Out.

  4. speaking of media manipulation by those with “inner agendas” is so audacious, inspite of the loss of usps the tne of 3.1 billion $ due to the questionable “prefunding” ( who will prefund in these days…are we having so much of excess!) out of the 3.3 billion quoted by “some” media and some reports who are in favour of “political games creating political platform for dems and gop to play” …it is really sad….i mean them quoting the prefunding $’s in usps financials…it belongs to nowhere financials…if ….in the treasury not usps!

  5. The GOP should focus on giving USPS craft workers the early out incentives, and other monies to upright the USPS, because this USPS is intertwined with over a trillion dollars of commerce, when the USPS comes down, so does this American economy, arrogance or ignorance?, how can Congress okay Trillions to bailout banks and for worthless wars, that cost the taxpayers and take the lives of our Soldiers, yet want to cut those who teeter on the verge of bankruptcy and live pay check to pay check ?
    There is a very simple answer, Congress as well as many State and local Governments are disconnected and/or trying to keep their padded pay checks at the cost of depriving the working class of a decent existence, the so called American Dream, has turned into a nightmare for most.
    The reason the Post Office is mentioned is because it is a disaster happening now, from overpaid Management who have squandered billions on failed Postal
    experiments to Unions that have gone from “do what is good for the members unions”, to advancing their own political agendas.
    The majority of Federal/ Postal workers , excluding the Fat Cats in Congress and Federal/ Postal management, may average $40- $55,000 dollars, after reaching the top rate, and that depends upon the Agency and/or the pay Grades.
    Congress truly no longer represents those who they serve, and the Unions and Management in the Postal/ Federal Government agencies are no better.
    When the above mentioned wake up and see the disasters looming will they change their ways ?, or are they so blind and/ or arrogant ,that we should prepare for the worst ?, time will tell very soon.

  6. Issa and his crony ruling elite buddies are conspiring against any and all labor union jobs. The postal service and federal workforce are the largest union entity.Congress has really imposed a hidden postal tax on the economy so that millionaires like Mitt Romney can pay only 13.9 percent tax rate.The people supporting teh ruling elite are billionaires,whose only concern is to maintain and pass on power. The american spring is coming, go NRA

  7. Postal workers are not permitted to strike because “Congress has designated the Postal Service as an ESSENTIAL SERVICE TO THE NATION!!!”

    Yeah, essential in that we are a CASH COW for Congress.

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