A Study of Sensitivity to Actuarial Assumptions Through the Case of USPS Financial Deficit
Open Access
Author:
Hui, Xiaotong
Area of Honors:
Actuarial Science
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Ron Gebhardtsbauer, Thesis Supervisor Ron Gebhardtsbauer, Thesis Honors Advisor Evan Garrett Morgan, Faculty Reader
Keywords:
USPS Forecasting Assumptions Sensitivity
Abstract:
The U.S. Postal Service Office of Inspector General (OIG) suggested that a large surplus in its pension fund with the Civil Service Retirement System (CSRS) and the Federal Employees’ Retirement System (FERS) could help USPS ease their financial burden. However, a recent update forecasts a smaller surplus mainly due to the change in the interest rate environment. By comparing the forecast with alternatives, this paper will illustrate how sensitive the results are to different forecasting assumptions.
