US Postal Service 2012 Annual Report Download - page 99

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2012 Report on Form 10-K United States Postal Service- 98 -
Because the number of employees participating in FERS has decreased by 9.8% over the past three years,
the period-to-period comparability of the contributions for the years 2012, 2011, and 2010 is impacted. This
has been somewhat offset by higher required FERS contribution percentages.
The number of employees enrolled in each of the retirement plans at the end of 2012, 2011, and 2010 is as
follows:
Retirement Enrollment by Program
(Actual numbers) 2012 2011 2010
CSRS 67,224 79,014 90,480
Dual CSRS 3,942 4,551 5,206
FERS 457,292 473,686 488,222
Total Enrollment 528,458 557,251 583,908
Employer cash contributions to retirement plans were $3,988 million in 2012, $3,214 million in 2011, and
$3,944 million in 2010. These amounts do not include Social Security contributions. Employer contributions,
as a percentage of employee basic pay for FERS will remain 11.9% in 2013.
Employee contributions for the past three years, as a percentage of employee basic pay, were 7.0% for
CSRS and 0.8% for Dual CSRS and FERS in 2012, 2011, and 2010.
In 2011, at a time when OPM had projected that the Postal Service had overfunded its FERS obligation by
$11.4 billon, the Postal Service sought to apply the overfunded balance to amounts currently due for
employer contributions and ceased making employer FERS contributions in June 2011 through November
2011. The Postal Service resumed the regular biweekly payments for FERS employer’s contributions and
remitted all previously withheld payments in December 2011, including the $911 million accrued at
September 30, 2011.
OPM’s most recent calculation estimates the FERS surplus at $2.6 billion at September 30, 2011, the latest
actual data available. This reduction in the estimated surplus resulted primarily from changes to
government-wide economic and demographic assumptions made by OPM, as well as actual 2011
experience. OPM currently estimates the FERS surplus will grow to approximately $3.0 billion by
September 30, 2012. The Postal Service is requesting that OPM calculate FERS liabilities utilizing Postal
Service-specific assumptions.
NOTE 9 — HEALTH BENEFIT PLANS
CURRENT EMPLOYEES
Substantially all career employees are covered by the Federal Employees’ Health Benefits Program
(FEHBP). This plan covers both active and retired employees. Health care benefits are available to all
participants who meet certain eligibility requirements. In addition to administering the program, OPM
allocates the cost of FEHBP to the various participating government agency employers. The Postal Service
cannot direct the costs, benefits, or funding requirements of the plan and; therefore, accounts for program
expenses using multiemployer plan accounting rules. Contributions to the plan are recorded as an expense
in the period in which the contribution is due. The portion of the premium cost paid by the Postal Service for
most active employees is determined through agreements with our unions.
Employees paid approximately 22% of total premium costs in 2012, 21% of the premium costs in 2011, and
20% of the premium costs in 2010. Postal Service employee healthcare expense was $5,187 million in
2012, $5,222 million in 2011, and $5,141 million in 2010, and are included in “Compensation and benefits”
in the Statement of Operations.