Causes of the Postal Service FERS Surplus – Update

Two months ago, we released a white paper entitled Causes of the Postal Service FERS [Federal Employees’ Retirement System] Surplus. The paper was prepared with the assistance of the actuarial firm Hay Group. Hay Group found that the postal surplus in the FERS resulted from differences between Postal Service characteristics and the characteristics of the rest of the federal government and recommended using Postal Service-specific assumptions to measure the FERS liability. Since the release of the white paper, the Office of Personnel Management (OPM) has issued its annual estimate of the FERS surplus based on new economic and demographic assumptions adopted in July. We asked Hay Group to update their previous estimate of the surplus using Postal Service-specific assumptions to reflect OPM’s changes.