7 ms·

> ...which mandates that the agency pre-fund health benefits for retirees up to 2056. On it's face that sounds like an incredibly onerous requirement. Not bein

> ...which mandates that the agency pre-fund health benefits for retirees up to 2056. On it's face that sounds like an incredibly onerous requirement. Not being a US resident though, it's quite possible it makes sense and my ignorance simply can't tell. Could someone with more insight provide additional context here?

fluffything 6y ago
There is a John Oliver's Last Week Tonight episode from a couple of weeks ago about this topic. Completely worth the 20 minutes it takes to watch it.
- ShroudedNight 6y ago
  Are you referring to the episode[1] (posted May 10th) or was there another, more recent one? [1] https://www.youtube.com/watch?v=IoL8g0W9gAQ https://www.youtube.com/watch?v=IoL8g0W9gAQ
  - fluffything 6y ago
    Yes, that's the one.
  - throwaway0a5e 6y ago
    I can't watch right now but does he do a decently bipartisan take on it? At the time the requirement to fund pensions through 2050ish was passed it got support from republicans who wanted to make life financially harder for USPS and democrats who wanted to guarantee that employees (union employees, so making sure they get a good deal is even more important) would be provided for and that USPS couldn't weasel out of it's obligations as part of a future bailout, perhaps by a congress that would have given employees the shaft.
    - tehwebguy 6y ago
      I’m always looking for videos that “debunk” Oliver to make sure I’m getting reasonable information but I never find any. Not sure if this means he’s usually right or not!
      - throwaway0a5e 6y ago
        I've been following police violence and civil liberties for more than a decade now. I like to think I'm pretty well informed on the issue. His episode on riots didn't say anything wrong but he just kinda laid it all at the feet of the cops for shooting one too many unarmed black people when that's either a red herring or the straw that broke the camels back depending on how cynical you are. I get that he has to take a complex situation and make it into something a nationwide general audience can laugh at but he seemed to go to great lengths to avoid casting shade at city and state politicians (and by proxy voters) who bear a lot of responsibility here. He didn't say anything wrong but I was really disappointed how one sided it was. I know he's a comedian. I know he has an agenda. But it makes me suspect his other stuff might be tilted.
        tehwebguy 6y ago
        No, if you mean the recent one called "Police" you are mistaken. At about 5:00 in he spends 6+ minutes talking about the decisions that put police in this position. * "Look, clearly, the police are just one part of a larger system of inequality, and for tonight we're going to focus primarily on them" * Then spends the next few sentences talking about how TV and film have painted an extremely unrealistic picture of police in the US * The history of policing and the policies we created it based on (slave patrol) * The Jim Crow laws & segregation that drove policing * Racist voters that tried to keet regions white * The media's whitewashing of the civil rights movement * Nixon & Regan's drug war + broken window policing * Stop & frisk policy and how more than 3/4 were black / hispanic * Then the big bomb at 9:05: "And let's be clear here, Democrats were very much involved in that, from big city mayors all the way up to this guy [shows a supercut of Bill Clinton in '93 promising 100k more police on the streets in various speeches, then "another 50k more in high crime neighborhoods"]" * This all came hand in hand with cutting every social service possible and pushing all of the extra work onto police * "So, while we should absolutely be angry at the police right now, let's also be angry at the series of choices that left them as essentially the only public resource in some communities" So he spent around 15-20% of the total time making it incredibly clear that while this is a police problem not a police only problem. What I'm more interested in knowing is, are his facts wrong? Or maybe is he leaving out an entirely separate side of things that point to the real issue? That's what I always wonder in the back of my mind.
pm90 6y ago
It is a completely dubious provision that loony anti Government Republicans passed to deliberately handicap the Postal Service. No other Public or Private agency has such onerous requirements.
eru 6y ago
Most of the weirdness comes from government employees having special kinds of pensions (and health benefits). If they were on a defined contribution plan like most of the rest of the economy, this provision would just mean that they actually need to make contributions on time.
- Yoofie 6y ago
  Can you explain this a bit more? What do you mean they don't contribute on time?
  - eru 6y ago
    It's all about accounting. Naively, you might want to keep track only of money that flows in and out of your business. But that can be rather misleading. So typically account for expenses when they are incurred. That means for example that in your accounting you set aside a bit of money for your rent every day, even if the physical cash only leaves your wallet once a month or even once a year. That way your accounting reflects the economic reality of your business, even if it doesn't reflect how much cash is in your wallet. The economic reality is important, because even if you have cash on hand now, but predictably won't earn enough money to pay back a debt that's coming due at the end of the year, you better panic early instead of acting all surprised. See https://www.accountingtools.com/articles/when-are-expenses-incurred.html https://www.accountingtools.com/articles/when-are-expenses-i... for more details. Well, when you promise people a pension dependent on how long they worked for you, it makes sense to make a provision every day they work for you, for the predictable outflow of cash you will have in a few decades. Typically you build up a fund or some kind of reserve to meet these predictable future outflows. See also https://en.wikipedia.org/wiki/Reserve_(accounting) https://en.wikipedia.org/wiki/Reserve_(accounting) In the special case of pensions, you might even go one step further: instead of just having a reserve on your books, you might want to ring fence a specific amount of money and put that part of your balance sheet in a separate investment vehicle or fund. So that for example bankruptcy of the parent company wouldn't imperil pensions already promised. See also https://en.wikipedia.org/wiki/Pensions_crisis https://en.wikipedia.org/wiki/Pensions_crisis The opposite of having such reserves is called 'unfunded liabilities'. Sounds nasty, doesn't it? From the Pension Crisis article: > In addition to states, U.S. cities and municipalities also have pension programs. There are 220 state pension plans and approximately 3,200 locally administered plans. By one measure, the unfunded liabilities for these programs are as high as $574 billion. The term unfunded liability represents the amount of money that would have to be set aside today such that interest and principal would cover the gap between program cash inflows and outflows over a long period of time.
fake-name 6y ago
It is a extremely onerous requirement. It's part of the republican agenda to destroy all publicly owned infrastructure. They couldn't get the votes to privatize the USPS, so they're just trying to ruin it instead.
archgoon 6y ago
No it's an incredibly onerous requirement. No it doesn't make sense. https://en.wikipedia.org/wiki/Postal_Accountability_and_Enhancement_Act https://en.wikipedia.org/wiki/Postal_Accountability_and_Enha... https://ips-dc.org/how-congress-manufactured-a-postal-crisis-and-how-to-fix-it/ https://ips-dc.org/how-congress-manufactured-a-postal-crisis...
- perl4ever 6y ago
  I've heard about how terrible this is for a long time, so I just went and checked your first link there, and it says that the cost is about $5.5B per year. It appears that the USPS has about 497K employees[1]. So it seems like that is around $11K per employee per year. That doesn't sound particularly out of line in magnitude. The rhetoric about paying for the next 50 years sounds like somehow the post office is being charged at more than the amount necessary to maintain a steady state. Is it that they would be paying $5500/year/employee, but they have to pay double that for 50 years? I'm having a hard time wrapping my head around what exactly is the problem and where the unreasonableness lies. I'm sure a Republican would say that the problem is the amount of benefits, and I can imagine that might be disingenuous, but I don't honestly understand what's really going on despite hearing about it for years and years. Maybe someone can ELI5 why or how there's a gap between the long run average cost of the retirees and the payments. [1]https://about.usps.com/who-we-are/postal-history/employees-since-1926.pdf https://about.usps.com/who-we-are/postal-history/employees-s...
  - derivagral 6y ago
    The "up front" part I think is what is considered onerous. Typically you'd target a result in the future and work backwards off of an average return rate (over years/decades, not months!) to ballpark a "this is what we need now to fund (with interest/returns) our pension obligations in the future". As one can see from many pensions today though, this setup often falls prey to politics or other mismanagement. I think the "other side" sees it as an attempt to say "USPS can't stay solvent, time to chuck it over to the private sector." while ignoring that other comparable businesses do not and will not have such an explicit cash requirement, which by definition makes them looks better.
Spooky23 6y ago
For a variety of reasons, there is a deep seated animus towards the post office held by key donors to the Republican Party. It doesn’t make particular sense.
- kevingadd 6y ago
  It makes sense in the wider context of the republican party generally viewing free universal services as a bad thing - the push to privatize education, the push to eliminate or scale back public health care systems like medicare, the push to scale back public pension systems like social security. A given politician might have their own reasons for wanting to privatize everything (profit, ideology, etc) but it's pretty consistent across the whole party that they aren't fond of any of these programs - I wouldn't actually attribute this to key donors.
  - Spooky23 6y ago
    Most of that party platform stuff is just fluff. The more reactionary donors have a real generational hatred of civil service in general and the post office in particular. Alot of fringe thinking from the 1960s and 70s is front and center today.
- Avshalom 6y ago
  https://about.usps.com/who-we-are/postal-history/african-american-workers-20thc.htm https://about.usps.com/who-we-are/postal-history/african-ame...
- NovemberWhiskey 6y ago
  Can you speak a little to why it doesn't make sense? There are multiple responses on this thread where people are asserting that it's obviously wrong. It's not obvious to me - could you provide some more details?
TrackerFF 6y ago
It's part of a long-standing battle of the Republican Party to crack down on unions. This is a strategy called "Starving the beast". Basically, they impose incredibly harsh financial burdens on the company, and then argue that it's unprofitable.
- schnable 6y ago
  This law is often credited to Republicans trying to destroy the USPS but the law was cosponsored by Democrats and sailed through congress without much pushback: https://www.congress.gov/bill/109th-congress/house-bill/6407 https://www.congress.gov/bill/109th-congress/house-bill/6407
  - jellicle 6y ago
    Yes, a number of Democrats are complicit, but it is certainly mainly a Republican objective.
SamReidHughes 6y ago
They have to pre-fund the benefits they already owe employees. It’s perfectly reasonable. Without it, they’d come begging to the feds for money in a couple decades. A private enterprise, on the other hand, would only hurt creditors if it can’t pay a pension.
- learc83 6y ago
  > A private enterprise, on the other hand, would only hurt creditors if it can’t pay a pension. There’s a Federal fund setup specifically to help pay pensions for companies that go bankrupt.
  - leereeves 6y ago
    The Pension Benefit Guarantee Corporation? It's funded by insurance premiums paid by companies that offer pensions, not by taxes, and it cuts benefits when it takes over a pension plan. https://www.pbgc.gov/about/how-pbgc-operates https://www.pbgc.gov/about/how-pbgc-operates
    - learc83 6y ago
      >It's funded by insurance premiums paid by companies that offer pensions, not by taxes, It's not much different than the post office itself in that regard. It's losing money every year. At some point congress will step in and bail them out. Any time a company goes bankrupt and forces them to take over pension obligations they lose more money.
  - prepend 6y ago
    That’s not for companies that explicitly underfunded their pension and now don’t have coverage.
    - learc83 6y ago
      That's one of the purposes of the PBGC--to prevent people from losing their pensions when companies have problems. Look at the history of the PBGC and bankruptcy. Companies routinely use bankruptcy to benefit creditors at the expense of the PBGC. Basically creditors get paid, while the PBGC gets stuck footing the bill for pensions.
soldierof4chan 6y ago
The responses here are full of misinformation. The bill in question was passed with unanimous Bipartisan support And the endorsement of one of the postal employee unions. See: https://www.congress.gov/bill/109th-congress/house-bill/6407 https://www.congress.gov/bill/109th-congress/house-bill/6407 They’re required to fund the present value of employee retirement benefits.
cwhiz 6y ago
I don’t find it onerous at all. The USPS pension will ultimately be one of the few fully funded public pensions. Head to your favorite search engine, pick any city or state in the US, and then follow it with “pension crisis.” USPS retirees will be better off than virtually any other non-military government employee.
- eru 6y ago
  I am inclined to agree. But I assume that in practice it's all just down to accounting: retirees tend to vote a lot. So I expect pensions to be bailed out. Especially government pensions. USPS is just forced to already confront reality early, instead of waiting for the bailout later.
  - delfinom 6y ago
    I'm waiting for GE to implode. Their pension liability is easily near $100 billion and they have no ability to fund it. And of course because this is America, we are going to end up giving GE some welfare.
jellicle 6y ago
The USPS is the largest unionized operation in the USA. Republicans are trying to drive it into crisis and kill it. So they passed a law which requires it to set aside vast amounts of money to prefund retirement obligations on a scale which no other organization in the USA has to do. At the same time, they are refusing to let it raise postage rates or otherwise generate more revenue. And in the news recently (past few weeks), Trump has appointed a new head of the agency who is ordering it to slow down mail delivery. Goal is to get the public to perceive it as a money-losing, inefficient operation which should be destroyed and outsourced to private companies (who will immediately hugely raise postage rates, reduce letter carrier pay, reduce delivery speed, and so on).
NovemberWhiskey 6y ago
The language is ... inflammatory? All pension benefits in well-operated schemes are, by definition, pre-funded. You can't have a pay-as-you-go type of system because, if your company went bankrupt tomorrow, you might have retirees that still have a life expectancy in the decades. You get an actuary to look at your current and future obligations based on your workforce, schedule of entitlements etc. and they work out how much you need to contribute to the scheme today to make sure that it is funded. The idea is that some disaster could befall your company at any time and retirees would not be out of pocket. This is what pre-funded means. It doesn't mean "when I join the USPS at age 21 they have to assume I'm going to retire with 40 years of service and immediately put aside cash for that". Now, typically, retiree health benefits are not included in this setup because they're not guaranteed. i.e. there is nothing in the law that requires them to be maintained. On the other hand, the USPS is required to provide those retiree health benefits. It can't stop paying them unless Congress passes a law. It does at least seem consistent with the treatment of pension benefits on this basis.

fluffything 6y ago

There is a John Oliver's Last Week Tonight episode from a couple of weeks ago about this topic. Completely worth the 20 minutes it takes to watch it.

ShroudedNight 6y ago
Are you referring to the episode[1] (posted May 10th) or was there another, more recent one? [1] https://www.youtube.com/watch?v=IoL8g0W9gAQ https://www.youtube.com/watch?v=IoL8g0W9gAQ
- fluffything 6y ago
  Yes, that's the one.
- throwaway0a5e 6y ago
  I can't watch right now but does he do a decently bipartisan take on it? At the time the requirement to fund pensions through 2050ish was passed it got support from republicans who wanted to make life financially harder for USPS and democrats who wanted to guarantee that employees (union employees, so making sure they get a good deal is even more important) would be provided for and that USPS couldn't weasel out of it's obligations as part of a future bailout, perhaps by a congress that would have given employees the shaft.
  - tehwebguy 6y ago
    I’m always looking for videos that “debunk” Oliver to make sure I’m getting reasonable information but I never find any. Not sure if this means he’s usually right or not!
    - throwaway0a5e 6y ago
      I've been following police violence and civil liberties for more than a decade now. I like to think I'm pretty well informed on the issue. His episode on riots didn't say anything wrong but he just kinda laid it all at the feet of the cops for shooting one too many unarmed black people when that's either a red herring or the straw that broke the camels back depending on how cynical you are. I get that he has to take a complex situation and make it into something a nationwide general audience can laugh at but he seemed to go to great lengths to avoid casting shade at city and state politicians (and by proxy voters) who bear a lot of responsibility here. He didn't say anything wrong but I was really disappointed how one sided it was. I know he's a comedian. I know he has an agenda. But it makes me suspect his other stuff might be tilted.
      - tehwebguy 6y ago
        No, if you mean the recent one called "Police" you are mistaken. At about 5:00 in he spends 6+ minutes talking about the decisions that put police in this position. * "Look, clearly, the police are just one part of a larger system of inequality, and for tonight we're going to focus primarily on them" * Then spends the next few sentences talking about how TV and film have painted an extremely unrealistic picture of police in the US * The history of policing and the policies we created it based on (slave patrol) * The Jim Crow laws & segregation that drove policing * Racist voters that tried to keet regions white * The media's whitewashing of the civil rights movement * Nixon & Regan's drug war + broken window policing * Stop & frisk policy and how more than 3/4 were black / hispanic * Then the big bomb at 9:05: "And let's be clear here, Democrats were very much involved in that, from big city mayors all the way up to this guy [shows a supercut of Bill Clinton in '93 promising 100k more police on the streets in various speeches, then "another 50k more in high crime neighborhoods"]" * This all came hand in hand with cutting every social service possible and pushing all of the extra work onto police * "So, while we should absolutely be angry at the police right now, let's also be angry at the series of choices that left them as essentially the only public resource in some communities" So he spent around 15-20% of the total time making it incredibly clear that while this is a police problem not a police only problem. What I'm more interested in knowing is, are his facts wrong? Or maybe is he leaving out an entirely separate side of things that point to the real issue? That's what I always wonder in the back of my mind.

pm90 6y ago

It is a completely dubious provision that loony anti Government Republicans passed to deliberately handicap the Postal Service. No other Public or Private agency has such onerous requirements.

eru 6y ago

Most of the weirdness comes from government employees having special kinds of pensions (and health benefits). If they were on a defined contribution plan like most of the rest of the economy, this provision would just mean that they actually need to make contributions on time.

Yoofie 6y ago
Can you explain this a bit more? What do you mean they don't contribute on time?
- eru 6y ago
  It's all about accounting. Naively, you might want to keep track only of money that flows in and out of your business. But that can be rather misleading. So typically account for expenses when they are incurred. That means for example that in your accounting you set aside a bit of money for your rent every day, even if the physical cash only leaves your wallet once a month or even once a year. That way your accounting reflects the economic reality of your business, even if it doesn't reflect how much cash is in your wallet. The economic reality is important, because even if you have cash on hand now, but predictably won't earn enough money to pay back a debt that's coming due at the end of the year, you better panic early instead of acting all surprised. See https://www.accountingtools.com/articles/when-are-expenses-incurred.html https://www.accountingtools.com/articles/when-are-expenses-i... for more details. Well, when you promise people a pension dependent on how long they worked for you, it makes sense to make a provision every day they work for you, for the predictable outflow of cash you will have in a few decades. Typically you build up a fund or some kind of reserve to meet these predictable future outflows. See also https://en.wikipedia.org/wiki/Reserve_(accounting) https://en.wikipedia.org/wiki/Reserve_(accounting) In the special case of pensions, you might even go one step further: instead of just having a reserve on your books, you might want to ring fence a specific amount of money and put that part of your balance sheet in a separate investment vehicle or fund. So that for example bankruptcy of the parent company wouldn't imperil pensions already promised. See also https://en.wikipedia.org/wiki/Pensions_crisis https://en.wikipedia.org/wiki/Pensions_crisis The opposite of having such reserves is called 'unfunded liabilities'. Sounds nasty, doesn't it? From the Pension Crisis article: > In addition to states, U.S. cities and municipalities also have pension programs. There are 220 state pension plans and approximately 3,200 locally administered plans. By one measure, the unfunded liabilities for these programs are as high as $574 billion. The term unfunded liability represents the amount of money that would have to be set aside today such that interest and principal would cover the gap between program cash inflows and outflows over a long period of time.

fake-name 6y ago

It is a extremely onerous requirement. It's part of the republican agenda to destroy all publicly owned infrastructure. They couldn't get the votes to privatize the USPS, so they're just trying to ruin it instead.

archgoon 6y ago

No it's an incredibly onerous requirement. No it doesn't make sense. https://en.wikipedia.org/wiki/Postal_Accountability_and_Enhancement_Act https://en.wikipedia.org/wiki/Postal_Accountability_and_Enha... https://ips-dc.org/how-congress-manufactured-a-postal-crisis-and-how-to-fix-it/ https://ips-dc.org/how-congress-manufactured-a-postal-crisis...

perl4ever 6y ago
I've heard about how terrible this is for a long time, so I just went and checked your first link there, and it says that the cost is about $5.5B per year. It appears that the USPS has about 497K employees[1]. So it seems like that is around $11K per employee per year. That doesn't sound particularly out of line in magnitude. The rhetoric about paying for the next 50 years sounds like somehow the post office is being charged at more than the amount necessary to maintain a steady state. Is it that they would be paying $5500/year/employee, but they have to pay double that for 50 years? I'm having a hard time wrapping my head around what exactly is the problem and where the unreasonableness lies. I'm sure a Republican would say that the problem is the amount of benefits, and I can imagine that might be disingenuous, but I don't honestly understand what's really going on despite hearing about it for years and years. Maybe someone can ELI5 why or how there's a gap between the long run average cost of the retirees and the payments. [1]https://about.usps.com/who-we-are/postal-history/employees-since-1926.pdf https://about.usps.com/who-we-are/postal-history/employees-s...
- derivagral 6y ago
  The "up front" part I think is what is considered onerous. Typically you'd target a result in the future and work backwards off of an average return rate (over years/decades, not months!) to ballpark a "this is what we need now to fund (with interest/returns) our pension obligations in the future". As one can see from many pensions today though, this setup often falls prey to politics or other mismanagement. I think the "other side" sees it as an attempt to say "USPS can't stay solvent, time to chuck it over to the private sector." while ignoring that other comparable businesses do not and will not have such an explicit cash requirement, which by definition makes them looks better.

Spooky23 6y ago

For a variety of reasons, there is a deep seated animus towards the post office held by key donors to the Republican Party. It doesn’t make particular sense.

kevingadd 6y ago
It makes sense in the wider context of the republican party generally viewing free universal services as a bad thing - the push to privatize education, the push to eliminate or scale back public health care systems like medicare, the push to scale back public pension systems like social security. A given politician might have their own reasons for wanting to privatize everything (profit, ideology, etc) but it's pretty consistent across the whole party that they aren't fond of any of these programs - I wouldn't actually attribute this to key donors.
- Spooky23 6y ago
  Most of that party platform stuff is just fluff. The more reactionary donors have a real generational hatred of civil service in general and the post office in particular. Alot of fringe thinking from the 1960s and 70s is front and center today.
Avshalom 6y ago
https://about.usps.com/who-we-are/postal-history/african-american-workers-20thc.htm https://about.usps.com/who-we-are/postal-history/african-ame...
NovemberWhiskey 6y ago
Can you speak a little to why it doesn't make sense? There are multiple responses on this thread where people are asserting that it's obviously wrong. It's not obvious to me - could you provide some more details?

TrackerFF 6y ago

It's part of a long-standing battle of the Republican Party to crack down on unions. This is a strategy called "Starving the beast". Basically, they impose incredibly harsh financial burdens on the company, and then argue that it's unprofitable.

schnable 6y ago
This law is often credited to Republicans trying to destroy the USPS but the law was cosponsored by Democrats and sailed through congress without much pushback: https://www.congress.gov/bill/109th-congress/house-bill/6407 https://www.congress.gov/bill/109th-congress/house-bill/6407
- jellicle 6y ago
  Yes, a number of Democrats are complicit, but it is certainly mainly a Republican objective.

SamReidHughes 6y ago

They have to pre-fund the benefits they already owe employees. It’s perfectly reasonable. Without it, they’d come begging to the feds for money in a couple decades. A private enterprise, on the other hand, would only hurt creditors if it can’t pay a pension.

learc83 6y ago
> A private enterprise, on the other hand, would only hurt creditors if it can’t pay a pension. There’s a Federal fund setup specifically to help pay pensions for companies that go bankrupt.
- leereeves 6y ago
  The Pension Benefit Guarantee Corporation? It's funded by insurance premiums paid by companies that offer pensions, not by taxes, and it cuts benefits when it takes over a pension plan. https://www.pbgc.gov/about/how-pbgc-operates https://www.pbgc.gov/about/how-pbgc-operates
  - learc83 6y ago
    >It's funded by insurance premiums paid by companies that offer pensions, not by taxes, It's not much different than the post office itself in that regard. It's losing money every year. At some point congress will step in and bail them out. Any time a company goes bankrupt and forces them to take over pension obligations they lose more money.
- prepend 6y ago
  That’s not for companies that explicitly underfunded their pension and now don’t have coverage.
  - learc83 6y ago
    That's one of the purposes of the PBGC--to prevent people from losing their pensions when companies have problems. Look at the history of the PBGC and bankruptcy. Companies routinely use bankruptcy to benefit creditors at the expense of the PBGC. Basically creditors get paid, while the PBGC gets stuck footing the bill for pensions.

soldierof4chan 6y ago

The responses here are full of misinformation. The bill in question was passed with unanimous Bipartisan support And the endorsement of one of the postal employee unions. See: https://www.congress.gov/bill/109th-congress/house-bill/6407 https://www.congress.gov/bill/109th-congress/house-bill/6407 They’re required to fund the present value of employee retirement benefits.

cwhiz 6y ago

I don’t find it onerous at all. The USPS pension will ultimately be one of the few fully funded public pensions. Head to your favorite search engine, pick any city or state in the US, and then follow it with “pension crisis.” USPS retirees will be better off than virtually any other non-military government employee.

eru 6y ago
I am inclined to agree. But I assume that in practice it's all just down to accounting: retirees tend to vote a lot. So I expect pensions to be bailed out. Especially government pensions. USPS is just forced to already confront reality early, instead of waiting for the bailout later.
- delfinom 6y ago
  I'm waiting for GE to implode. Their pension liability is easily near $100 billion and they have no ability to fund it. And of course because this is America, we are going to end up giving GE some welfare.

jellicle 6y ago

The USPS is the largest unionized operation in the USA. Republicans are trying to drive it into crisis and kill it. So they passed a law which requires it to set aside vast amounts of money to prefund retirement obligations on a scale which no other organization in the USA has to do. At the same time, they are refusing to let it raise postage rates or otherwise generate more revenue. And in the news recently (past few weeks), Trump has appointed a new head of the agency who is ordering it to slow down mail delivery. Goal is to get the public to perceive it as a money-losing, inefficient operation which should be destroyed and outsourced to private companies (who will immediately hugely raise postage rates, reduce letter carrier pay, reduce delivery speed, and so on).

NovemberWhiskey 6y ago

The language is ... inflammatory? All pension benefits in well-operated schemes are, by definition, pre-funded. You can't have a pay-as-you-go type of system because, if your company went bankrupt tomorrow, you might have retirees that still have a life expectancy in the decades. You get an actuary to look at your current and future obligations based on your workforce, schedule of entitlements etc. and they work out how much you need to contribute to the scheme today to make sure that it is funded. The idea is that some disaster could befall your company at any time and retirees would not be out of pocket. This is what pre-funded means. It doesn't mean "when I join the USPS at age 21 they have to assume I'm going to retire with 40 years of service and immediately put aside cash for that". Now, typically, retiree health benefits are not included in this setup because they're not guaranteed. i.e. there is nothing in the law that requires them to be maintained. On the other hand, the USPS is required to provide those retiree health benefits. It can't stop paying them unless Congress passes a law. It does at least seem consistent with the treatment of pension benefits on this basis.