Postal Service employees participate in one of three retirement programs of the U.S. government, based on the starting date of employment with the federal government. These programs are the Civil Service Retirement System (CSRS), Dual CSRS/Social Security System (Dual CSRS), and the Federal Employees Retirement System (FERS). These programs are administered by the Office of Personnel Management (OPM). The funding requirements and timing of employer and employee contributions to the programs can be altered at any time with the passage of a new law or an amendment of existing law. See Note 8, Retirement Programs, in the Notes to the Financial Statements for additional information.
All expenses of the retirement programs, except for retiree health benefits, are included in compensation and benefits expense. Retirement expense of $5,809 million for current employees in 2010 was $108 million, or 1.8%, less than the 2009 expense of $5,917 million and is primarily a result of the decreasing size of the work force. The decrease in the number of career employees resulted in a savings of $382 million. This savings was partially offset by an increase in the average retirement cost per employee of 4.6%. This is the result of a greater percentage of employees being in the more expensive FERS plan, compared to the CSRS plan. In 2010, the percentage of employees in the FERS plan increased to 83.6% from 81.4% in 2009 due to the declining number of employees in CSRS.
Retirement expense for current employees increased $18 million in 2009, or 0.3%, from 2008 expense of $5,899 million. Retirement expense was 7.7%, 8.2%, and 7.6% of total operating expenses in 2010, 2009 and 2008, respectively.
As described in Note 3, Summary of Significant Accounting Policies, in the Notes to the Financial Statements, we account for participation in the retirement programs of the U.S. government under multi-employer plan accounting rules. Although the Civil Service Retirement and Disability Fund (CSRDF) is a single fund and does not maintain separate accounts for individual agencies, P.L. 109-435 requires certain disclosures regarding obligations and changes in net assets as if the funds were separate. The following information is provided by OPM and represents the most recent actual data available, which is as of September 30, 2009, with projections to September 30, 2010.
