US Postal Service 2014 Annual Report Download - page 62

2014 Report on Form 10-K United States Postal Service 58
$934 million. As of September 30, 2013, contingent liabilities consisted of $809 million associated with labor and employment
matters, $48 million with asset retirement obligations, $49 million with tort matters and $33 million with contractual matters,
for a total of $939 million.
In addition to the amounts accrued in the financial statements, the Postal Service also has claims and lawsuits which it deems
reasonably possible of an unfavorable outcome which ranged from $325 million to $925 million at September 30, 2014 and
2013. No provisions for these reasonably possible losses are accrued for or included in the financial statements.
The Postal Service is from time to time involved in other litigation incidental to the conduct of its business, none of which is
expected to be material to its business, financial condition or operations.
Note 8- Retirement Benefit Plans
Pension Programs
Employees participate in one of three U.S. Government pension programs based on the starting date of their employment with
the Federal Government. These programs are the 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 OPM. The pension plans
generally provide for retirement, death and/or termination benefits for eligible employees, based on specific
eligibility/participation requirements, vesting periods and benefit formulas. As government-sponsored benefit plans, the CSRS,
Dual CSRS and FERS are not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.
Employees may also participate in the Thrift Savings Plan (“TSP”), a defined contribution retirement savings and investment
plan, administered by the Federal Retirement Thrift Investment Board.
CSRS provides a basic annuity plan benefit to employees hired before January 1, 1984. Dual CSRS provides a basic annuity
plan and Social Security benefits to employees hired between January 1, 1984 and January 1, 1987. Effective January 1, 1987,
FERS covers employees hired since December 31, 1983. FERS provides a basic annuity plan, Social Security and TSP benefits.
The Postal Service and its employees contribute to the basic annuity plan and Social Security at rates prescribed by law.
Employees who participate in the CSRS and Dual CSRS do not receive TSP matching contributions from the Postal Service.
The Postal Service participates in these multiemployer defined benefit pension plans with other related entities. The Postal
Service is required to provide funding and records an expense within “Compensation and benefits” expense in the Statements of
Operations for these plans based on the allocations to the Postal Service provided by the OPM. Annual funding requirements
can fluctuate significantly due to changes in federal law or regulation by the OPM. The Postal Service cannot direct the costs,
benefits, or funding requirements of the plans.
The risks of participating in these federal retirement plans are different from single-employer retirement plans in the following
aspects:
• Assets contributed to the plans by one agency may be used to provide benefits to employees of other participating
agencies.
• If a participating agency stops contributing to the plans, the unfunded obligations of the plan may be borne by the
remaining participating agencies.
• Postal Service participation in the federal retirement plans is required by law. If the Postal Service were permitted by a
change in law to discontinue participation in some of the federal retirement plans, it may be required to pay those plans
an amount based on the underfunded status of the plan, referred to as a withdrawal liability, if such a liability exists at
that time.
As of September 30, 2013, the latest actual data available, the CSRS plan for the Federal Government, taken as a whole, is less
than 65% funded. The Postal Service made no contribution to the CSRS plan in 2014, 2013 or 2012, in accordance with P.L.
109-435. As of September 30, 2013, the latest actual data available, the FERS plan is greater than 80% funded, for the Federal
Government as a whole. For 2014, 2013 and 2012, the Postal Service provided more than 5% of the total plan contributions for
FERS from all employers (as disclosed in the OPM’s Civil Service Retirement and Disability Fund Annual Report). Because
these government-sponsored retirement plans are not subject to the rules and regulations of the Pension Protection Act of 2006,
typical plan measurements such as zone status and financial improvement plan status, or rehabilitation plan status are not
available for these plans.