US Postal Service 2008 Annual Report Download - page 59

2008 Annual Report United States Postal Service | 59
Note 10 — Retirement programs
Pension Programs
Our employees participate in one of the following pension
programs based upon the starting date of their employ-
ment with the federal government. Employee and employ-
er contributions are made to the Civil Service Retirement
System (CSRS), the Dual Civil Service Retirement System/
Social Security (Dual CSRS), or the Federal Employees
Retirement System (FERS), all of which are administered
by the Office of Personnel Management. Employees may
also participate in the Thrift Savings Plan (TSP), which is
a defined contribution retirement savings and investment
plan. Postal Service employees are authorized to partici-
pate in the TSP by the Federal Employees Retirement Sys-
tem Act of 1986. The TSP is administered by the Federal
Retirement Thrift Investment Board.
CSRS
Under the Postal Reorganization Act, officers and career
employees hired prior to January 1, 1984, are covered by
the Civil Service Retirement System, which provides a ba-
sic annuity toward which we and the employee contribute
at rates prescribed by law. Effective October 14, 2006,
P.L.109-435 suspends the obligation of making employer
contributions for CSRS employees’ retirement. We do not
match TSP contributions for employees who participate
in CSRS.
DUAL CSRS
Employees with prior U.S. government service who were
hired between January 1, 1984, and January 1, 1987, are
covered by Dual CSRS, which consists of a basic annu-
ity and Social Security. We and the employee contribute to
Social Security and the basic annuity at rates prescribed
by law. We do not match TSP contributions for employees
who participate in Dual CSRS.
FERS
Effective January 1, 1987, officers and career employees
hired since December 31, 1983, are covered by the Fed-
eral Employees Retirement System Act of 1986, except for
those covered by Dual CSRS. Also included are employees
formerly covered by CSRS who elected in 1987, 1988, and
1998 to participate in FERS.
FERS consists of Social Security, a basic annuity plan, and
TSP. We and the employee contribute to Social Security
and the basic annuity plan at the rate prescribed by law. In
addition, we are required to contribute to TSP a minimum
of 1% per year of the basic pay of employees covered by
this system. We also match a voluntary employee contribu-
tion up to 3% of the employee’s basic pay, and 50% of a
contribution between 3% and 5% of basic pay.
Employee / Employer Contributions
Employer and employee contributions, as a percentage of
employee basic pay, are as follows for each of the three
plans for 2008, 2007, and 2006.
Retirement Contribution 2008 2007 2006
(Percentage)
CSRS Employer — — 17.4
CSRS Employee 7.0 7.0 7.0
Dual CSRS Employer — — 18.0
Dual CSRS Employee 0.8 0.8 0.8
FERS Employer 11.2 11.2 11.2
FERS Employee 0.8 0.8 0.8
The number of employees enrolled in each of the retirement
plans at the end of 2008, 2007, and 2006 is as follows.
Retirement Enrollment
by Program 2008 2007 2006
(Actual numbers)
CSRS 130,126 144,034 157,945
Dual CSRS 7,128 7,716 8,150
FERS 525,984 533,012 530,043
Expense Components
The following table lists the components of our total retire-
ment expenses that are included in Compensation and
benefits expense in the Statements of Operations for 2008,
2007, and 2006.
Retirement Expense 2008 2007 2006
(Dollars in millions)
FERS $ 2,909 $ 2,771 $ 2,652
Social Security 1,932 1,904 1,843
FERS Thrift Savings Plan 1,058 1,007 960
CSRS — 52 1,450
Dual CSRS — 3 75
CSRS “Supplemental Liability” — — 26
Total Retirement Expense $ 5,899 $ 5,737 $ 7,006
Employer cash contributions to retirement plans were
$3,936 million in 2008, $3,889 million in 2007, and
$5,122 million in 2006. These amounts do not include
Social Security contributions and interest expense on de-
ferred retirement liabilities.