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Making the USPS pay for the accrued retirement benefits of it's workers isn't onerous. It totally makes sense for a shrinking business that likely will never g

Making the USPS pay for the accrued retirement benefits of it's workers isn't onerous. It totally makes sense for a shrinking business that likely will never grow into new markets. If the USPS cannot afford the pensions they are promising now, how can it ever hope to afford it later. Unfunded pensions have been a huge disaster at the local level. It's leading Chicago and Illinois into bankruptcy. It's easy for government to promise great retirement benefits if they don't actually have to pay to provide them. All government should have to fund any accrued benefit for employees. And for businesses, any sort of accrued benefit goes on their books as a liability. While they don't have to pre-fund it, if they company doesn't, it could make the company insolvent if the amount goes too high.

toomuchtodo 11y ago
They should be funding pensions for employees that haven't even been born yet? Are you going to make the same argument for the Defense Department? Because they have way more pensioners to support.
- rhino369 11y ago
  That is a myth (or depending who you talk to a purposeful lie by the Postal workers union). They don't have to pre-fund for future workers. They only pre-fund over the time it takes for the worker to get a pension. But they have to fund the whole cost of the pension. So if you are starting as a postman tomorrow, they don't have to save anything. But if it takes 20 years to get a full pension, each year they have to save 1/20th of the total cost of your pension (estimate for the next 75 years). All government should operate on an accrual basis. I wouldn't demand they hold the funds, but it should count as part of the national debt.
  - toomuchtodo 11y ago
    > All government should operate on an accrual basis. I wouldn't demand they hold the funds, but it should count as part of the national debt. Its a pipedream. There's nowhere you could demand they hold the funds except US Treasuries, which is then you just turning around and giving Congress more money to spend irresponsibly at low interest rates.
Jtsummers 11y ago
Pre-funding doesn't make sense. If I'm a new hire, they are expected to set aside today the money I'll receive in 30 years. There's zero-guarantee that I'll even be here in 30 years, let alone have retired from the USPS. What makes more sense is to set aside a portion per year during my career. If my salary is $60k, health and tax liabilities and other HR things may push my cost to the USPS to $100k, and add on this retirement liability I might cost $130k/year. Instead, in my first year I end up costing them $100k (salary, tax, health) + several million (retirement benefits).
- johntb86 11y ago
  If I'm a new hire, they are expected to set aside today the money I'll receive in 30 years. I don't believe that's the case. From http://www.gao.gov/assets/660/650511.pdf http://www.gao.gov/assets/660/650511.pdf : The liability for current employees is a portion of the ultimate liability for their future retiree benefits; the liability accrues steadily over their working years, from zero at date of entry into FEHBP to the full liability at retirement. Contrary to some claims, there is no liability held, nor contributions made, for any future employees who have yet to be hired or yet to be born. That is, their liability (and the amount they need to be prefunded for) starts at 0 when they're hired and gradually increases.

toomuchtodo 11y ago

They should be funding pensions for employees that haven't even been born yet? Are you going to make the same argument for the Defense Department? Because they have way more pensioners to support.

rhino369 11y ago
That is a myth (or depending who you talk to a purposeful lie by the Postal workers union). They don't have to pre-fund for future workers. They only pre-fund over the time it takes for the worker to get a pension. But they have to fund the whole cost of the pension. So if you are starting as a postman tomorrow, they don't have to save anything. But if it takes 20 years to get a full pension, each year they have to save 1/20th of the total cost of your pension (estimate for the next 75 years). All government should operate on an accrual basis. I wouldn't demand they hold the funds, but it should count as part of the national debt.
- toomuchtodo 11y ago
  > All government should operate on an accrual basis. I wouldn't demand they hold the funds, but it should count as part of the national debt. Its a pipedream. There's nowhere you could demand they hold the funds except US Treasuries, which is then you just turning around and giving Congress more money to spend irresponsibly at low interest rates.

Jtsummers 11y ago

Pre-funding doesn't make sense. If I'm a new hire, they are expected to set aside today the money I'll receive in 30 years. There's zero-guarantee that I'll even be here in 30 years, let alone have retired from the USPS. What makes more sense is to set aside a portion per year during my career. If my salary is $60k, health and tax liabilities and other HR things may push my cost to the USPS to $100k, and add on this retirement liability I might cost $130k/year. Instead, in my first year I end up costing them $100k (salary, tax, health) + several million (retirement benefits).

johntb86 11y ago
If I'm a new hire, they are expected to set aside today the money I'll receive in 30 years. I don't believe that's the case. From http://www.gao.gov/assets/660/650511.pdf http://www.gao.gov/assets/660/650511.pdf : The liability for current employees is a portion of the ultimate liability for their future retiree benefits; the liability accrues steadily over their working years, from zero at date of entry into FEHBP to the full liability at retirement. Contrary to some claims, there is no liability held, nor contributions made, for any future employees who have yet to be hired or yet to be born. That is, their liability (and the amount they need to be prefunded for) starts at 0 when they're hired and gradually increases.