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Congress does this because Republicans in Congress want to privatize it. See also their bizarre retirement and healthcare prefunding requirement.

• cperciva 11y ago
  What's so bizarre about paying for costs when they are accrued? I wish that approach was applied more widely; imagine the effect on the USA's willingness to go to war if the expected long term cost of disability pensions and other veterans' benefits had to be set aside up front.
  • koolba 11y ago
    Amen brother! Defined benefit plans without sinking funds are a time bomb across this entire country. What I really wish they'd do is abolish all defined benefit plans and instead switch to defined contribution plans. That way they'd be forced to pay them up front and couldn't defer the payment to the next generation. Otherwise whoever is in charge now gets to mortgage off the future by caving to demand after demand. If people want defined benefits then the private sector can meet in the middle and handle the conversion/risk transfer. It's a tough sell but long term it's better for the fiscal stability of the country.
    • jdeibele 11y ago
      My understanding is that many, if not most, local governments have split their pension plans into two levels: employees hired before date X get the defined benefit plan; employees hired after that day get a defined contribution plan instead. In Oregon, the state Supreme Court has held that once you're hired the state has no right to change the retirement plan to your detriment. A few years ago there was a Republican candidate (Ron Saxton) for Governor who said he would fire all the state employees and re-hire them. Sounded very bizarre but the idea was to move them from one plan to the other
  • dpark 11y ago
    My understanding is that the USPS is effectively overfunding its pension and healthcare and required to continue doing so. The USPS claims as much: https://www.uspsoig.gov/sites/default/files/document-library-files/2015/ESS-WP-09-001.pdf https://www.uspsoig.gov/sites/default/files/document-library... But it's hard to get neutral information on this because most of the people putting forth information seem extremely partisan. I will say it's pretty bizarre to regulate USPS revenues downward while simultaneously regulating their obligations upward.
  • zardgiv 11y ago
    They're required by Congress to fund 75 years in advance. That means they're paying for costs _before_ they're accrued, for employees that are likely not even born yet. Bizarre is a perfectly reasonable way to describe it.
    • cperciva 11y ago
      No, they're only being required to fund the benefits over the next 75 years of current and past employees. The notion that they're being asked to fund benefits for people who haven't been hired yet is pure fiction.
      • zardgiv 11y ago
        Bald assertion is one way to make an argument, but it's not necessarily convincing.