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Inspector General Testifies on Postal Service's Financial Crisis

OIG Reviews Estimates of Postal Service’s  Liability for Retiree Health Care Benefits

Washington, DC, August 6, 2009 -- In testimony before a Senate subcommittee, David C. Williams, the Inspector General for the Postal Service, called upon Congress to adjust the Postal Service's payments into the retiree's health care benefits fund to a proper payment level to correct the debilitating problem caused by the overpayments. "The significant diversion of cash to pay for future retiree health care benefits has created an immediate financial crisis for the Postal Service," said Mr. Williams to the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security in testimony today. Click here to view Mr. William’s testimony.

 

 

OIG Reviews Estimates of Postal Service’s Liability for Retiree Health Care Benefits

OIG Reviews Estimates of Postal Service’s  Liability for Retiree Health Care Benefits

As we began working with the Hay Group model regarding the Postal Service Retiree Health Benefits Fund we identified an error. We notified the Hay Group and they acknowledged the error. The error was computational in nature and did not affect their overall conclusion, assumptions, or methodology.

Specifically, the error was the result of the use of the wrong percentages when adjusting the health care inflation rate from 7% to 5% for certain years within the model. When this mistake was corrected, the Hay Group estimate of the Postal Service’s overfunding under current law increases to $13.2 billion.

This results in lower projected annual payments for the Postal Service. Specifically, to reach the same OPM funding goal, the Postal Service would make payments of $1.57 billion per year.

To read the revised report – "Estimates of Postal Service Liability for Retiree Health Care Benefits" (Report Number ESS-MA-09-001)

click here

 

 

Pawning Your Career Away

OIG Reviews Estimates of Postal Service’s  Liability for Retiree Health Care Benefits

Is faking an injury worth it to collect Workers’ Comp? You decide . . .

In 2005, a Postal Service Mail Processing Machine Operator in New Jersey claimed an on-the-job injury that left her totally disabled and unable to work. Her workers’ comp. claim was accepted by the Department of Labor and resulted in a payout of more than $175,000 in compensation and medical benefits to the employee. Unable to work, the employee moved to Florida, collecting a monthly disability check of 75 percent of her salary – tax-free.

It seems like the story should end there, but it doesn’t. Last year, Special Agents from the Office of Inspector General received a tip that this former employee was working at another job in Florida while collecting these benefits. Undercover agents investigated and, using covert surveillance video, captured her working 10 hour days at a pawn shop. During this same period of time, she denied working for any employer or collecting any compensation on a Department of Labor claim form.

The OIG investigation led to the former employee pleading guilty to defrauding the workers’ compensation program. She was sentenced in federal court to two years probation, 50 hours community service, and ordered to pay $14,997 in restitution to the Postal Service. Her compensation benefits were terminated, which means the Postal Service will be saving over $1.5 million in future benefits that it will no longer need to payout. So was it worth “pawning” a postal career away?

If you suspect a Postal Service employee or former employee is making false workers’ comp. claims, contact us at 1-888-USPS-OIG.

 

 

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