U.S. Postal Service: Accounting for Postretirement Benefits

A 1992 GAO report found that the U.S. Postal Service's (USPS) use of the pay-as-you-go basis of accounting for the postretirement health benefit costs of employers participating in multiemployer plans was in accordance with existing private sector generally accepted accounting principles. GAO recently concluded that that report did not adequately consider the potential accounting ramifications of USPS's unique statutory obligations, which are not applicable to other multiemployer plans--both pension and other postretirement benefit plans. Given this, combined with the economic and competitive environment USPS now faces, ongoing efforts to transform USPS to address its financial and operational challenges, and both the Congress's and the public's call for more information and transparency in financial reporting, GAO concludes that now is an opportune time for USPS to reassess how best to account for and disclose this significant financial obligation.