The Postal Service ends the third quarter with a $3.5 billion dollar loss. But there are ways for the Postal Service to get back to black. Lorie Nelson is the Director of Financial Reporting for the USPS Office of Inspector General. She joined the Federal Drive to explain how the Postal Service might be able to use at least $5.5 billion of the $6.8 billion surplus in the Federal Employees Retirement System.

The postal service continues to pay more than its fair share of retieree health payments," and there's no present legislation to resolve that surplus.

The surplus was the result of the difference between the actual payouts and the overall liability that is estimated for the entire federal government, Nelson explained.

The agency is dealing with a two-pronged problem: the first is to mitigate the debt that it has despite accruing such a surplus, and the second is to change policy to stop future overfunding.

The postal service OIG's recommendation, Nelson said is for USPS to work with Congress to rectify the current surplus until it is spent, and to coordinate with OPM to change future practice.

"We've issued four reports in the past, and we are going to issue a summary report identifying overfunding issues in employees and retirees benefits funds," Nelson said. So there will be numbers as to what to expect for the 2011 fiscal year.