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Title page 1

Contents 3

Highlights 2

Letter 7

Background 9

USPS Has Acted to Improve Its Financial Condition, and Congress Has Provided Some Assistance 17

USPS Has Taken Several Actions to Increase Revenue and Decrease Expenses 17

USPS's Proposals to Change Federal Requirements to Become More Financially Self-Sufficient Have Been Partially Fulfilled 24

USPS's Current Financial Condition Is Poor, and It Does Not Have Updated Financial Projections 26

USPS's Expenses Have Outgrown Revenue 26

USPS Does Not Have Updated Projections of Its Future Financial Condition 33

USPS's Unfunded Benefit Liabilities Will Be Higher than Projected If Current Trends Continue 35

USPS Officials and Stakeholders Said USPS's Financial Condition Will Continue to Be a Challenge 38

Options Exist to Improve USPS's Financial Condition, but Congressional Action Is Required to Attain USPS Self-Sufficiency 39

A Wide Range of Options Exist to Improve USPS's Financial Condition 39

USPS's Financial Condition Will Not Be Sustainable Without Congressional Action 42

Conclusions 44

Recommendation for Executive Action 44

Agency Comments and Our Evaluation 45

Appendix I: Objectives, Scope, and Methodology 47

Appendix II: U.S. Postal Service and the Civil Service Retirement System (CSRS) 51

Appendix III: U.S. Postal Service and the Federal Employees Retirement System (FERS) 57

Appendix IV: U.S. Postal Service and Retiree Health Benefits 63

Appendix V: U.S. Postal Service and Workers' Compensation 70

Appendix VI: Introduction to and Results from Survey to Interviewees on Options for USPS and Congress on Financial Sustainability and Summary Results 75

Appendix VII: Comments from U.S. Postal Service 77

Appendix VIII: GAO Contacts and Staff Acknowledgments 79

Tables 4

Table 1. U.S. Postal Service's (USPS) Actual and Adjusted Net Losses, Fiscal Years 2020-2024 29

Table 2. U.S. Postal Service (USPS) Workers' Compensation Expense Under Three Different Approaches, Fiscal Years 2023-2024 74

Figures 4

Figure 1. Timeline of U.S. Postal Service (USPS) Events, 1970-2031 12

Figure 2. U.S. Postal Service (USPS) Total Expenses and Total Revenue, Fiscal Years 2007-2024 14

Figure 3. U.S. Postal Service (USPS) Projected and Actual Revenue, Fiscal Years 2021-2024 27

Figure 4. U.S. Postal Service (USPS) Actual and Projected Expenses, Fiscal Years 2021-2024 28

Figure 5. U.S. Postal Service's (USPS) Unfunded Benefit Liabilities and Debt, Fiscal Years 2020-2024 31

Figure 6. GAO and USPS Projections of U.S. Postal Service's (USPS's) Pension and Retiree Health Unfunded Liabilities, Fiscal Years 2025-2031 36

Figure 7. GAO and U.S. Postal Service's (USPS) Projections of USPS's Pension and Retiree Health Care Unfunded Liabilities as a Percentage... 37

Figure 8. Potential U.S. Postal Service (USPS) Options Most Mentioned by Stakeholders to Improve Its Financial Self-Sufficiency 40

Figure 9. Potential Congressional Options Most Often Mentioned by Stakeholders to Improve the U.S. Postal Service's (USPS) Financial Self-Sufficiency 41

Figure 10. U.S. Postal Service's (USPS) Past and Projected Civil Service Retirement System (CSRS) Pension Unfunded Liability, Fiscal Years 2007-2031 53

Figure 11. U.S. Postal Service's (USPS) Past and Projected Federal Employee Retirement System (FERS) Pension Unfunded Liability, Fiscal Years 2007-2031 60

Figure 12. U.S. Postal Service (USPS) Past and Projected Unfunded Liability for Retiree Health Benefits, Fiscal Years 2007-2031 67

Figure 13. U.S. Postal Service's (USPS) Past and Projected Workers' Compensation Unfunded Liabilities, Fiscal Years 2007-2031 72

Figure 14. GAO Grouping of Stakeholder Responses on Options for the U.S. Postal Service (USPS) 76