The Postal Regulatory Commission said it will hire an actuarial consultant to review the pension-payment system used by the financially struggling US Postal Service. The USPS’ Office of Inspector General released a report in January stating that the agency’s current pension-funding system resulted in an overpayment of $75 billion from 1972 to 2009.
The consultant will be tasked with advising the PRC on alternative pension-payment methods used by other government agencies and companies in the private sector. The organization will assess the appropriate level of funding, standard practices, the risks of overfunding versus underfunding and other issues, according to the PRC’s solicitation filed in the Federal Business Opportunities database on March 16. Interested parties have until March 31 to respond.
Computer Sciences Corporation of Falls Church, VA, and Advanced Technology Logistics of Sharpsburg, GA, are listed as interested parties on the FBO Web site.
The PRC had announced March 2 that it will review the pension funding system. John Potter, postmaster general and CEO of USPS, revealed his 10-year plan for restoring financial stability to the USPS. The plan included changing the payment system for retirees’ benefits, reducing delivery to five days per week and charging an exigent price increase in 2011.
Last fall, Congress passed a measure allowing the USPS to delay $4 billion in payments to its retirees’ fund. The agency, which saw a net loss of $3.8 billion for its 2009 fiscal year, faces a cumulative shortfall of $238 billion by 2020, according to Potter.
“We’re delighted that they’re moving forward. It was something that we asked of them and something that should yield a very interesting outcome,” said Gerald McKiernan, spokesperson for the USPS.
Ann Fisher, PRC spokesperson, said that there is no deadline for the organization to make any determinations, but it would like to complete the process “as expeditiously as possible, since [the pension fund] should be part of the debate.”