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Did you not read the part about how they have to fund their retirees health program up through 2054? That's millions to billions of dollars that they have to se

Did you not read the part about how they have to fund their retirees health program up through 2054? That's millions to billions of dollars that they have to set aside for potential future costs decades away. No other government program or service is required to do this.

SamReidHughes 6y ago
Did you not read the part where they only have to prefund accrued benefits? Oh wait, the article didn't include that part, did it.
- addicted 6y ago
  Source?
  - soldierof4chan 6y ago
    The bill itself describes the funding schedule: https://www.congress.gov/bill/109th-congress/house-bill/6407 https://www.congress.gov/bill/109th-congress/house-bill/6407 Regardless, the “pre-funding” period is over and the fund is running a deficit as retirees are currently paid from it, so it’s a moot point.
    - addicted 6y ago
      “ Establishes in the Treasury the Postal Service Retiree Health Benefits Fund, to be administered by OPM. Requires the Postal Service, beginning in 2007, to compute the net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year” Compute the net present value of future payments does not sound like “accrued” benefits at all. It sounds like future payments which is the opposite of accrued benefits. I don’t know the details of USPS’s finances, but reading that bill it seems they basically got rid of pensions around 2007 “ Postal Civil Service Retirement and Health Benefits Funding Amendments of 2006 - (Sec. 802) Relieves the Postal Service of an obligation to contribute matching amounts to its employees' civil service retirement.” but required that all existing pensions be prefunded. That’s an extremely onerous requirement and whether the fund has been funded or not, it will still affect service drastically. Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now.
      - zaroth 6y ago
        > ... net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year This means you calculate the total amount of added expected additional pension payments earned over the last year of work. So, if last year you could have retired with a pension estimated to pay out $100k, and this year your pension would be estimated to pay out $120k due to the additional year of service, then that number would be $20k. Since that $20k is not paid out all at once, but over a period of time in the future, you calculate the net present value which reduces the amount based on a “discount” rate which is the expected rate of return on your cash. So, $20k paid out over 10 years starting 10 years from now is discounted to, e.g. $14k, which is how much money you need invested today to fully fund that liability in the future. To sum it up, in that hypothetical example, the USPS is supposed to be banking that additional $14k to find the future liability. It’s actually exactly what anyone running a pension program absolutely should be doing.
      - NovemberWhiskey 6y ago
        >it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service In fact, it is somewhat of a moot point - the USPS has been accruing, but not paying. Service is being funded. The USPS actually stopped paying meaningfully to PSRHBF back in 2011. At this point, they're somewhat over $47bn behind in payments. Please take a look at the USPS 10-K to get the fine detail here.
      - soldierof4chan 6y ago
        The other commenters did will to address your misconceptions but I want to further elaborate on this one. > Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now The fund is not paid off as the Post Office never actually made the vast majority of its payments. It's also not in an account waiting to be used. It is being used right now to fund current retirees and it's running deficits. The reason it's a moot point is because even if this requirement were removed today it would operate in the same way i.e. pay as you go.
cwhiz 6y ago
Maybe all cities and states should have to do this? We have a massive pension crisis in the US. Many cities and states are not even 50% funded. It’s a looming disaster.
- x86_64Ubuntu 6y ago
  Do you not see what it's going to do with the USPS? Why would you want it done with cities and states, unless your goal is to privatize entire cities and states.
  - Tyrek 6y ago
    The argument here is that it's all shell games otherwise if the money isn't set aside - e.g. look at the broader trend with social security's solvency. With the way public funding has trended, it would not surprise me if any unfunded programs simply ran out of cash at some point. There isn't an easy answer to balance the needs of existing liabilities (pension commitments) with financial operations - the problem with the USPS was (I believe) the catch-up funding required to meet funding requirements, and not the actual funding itself.
    - jschwartzi 6y ago
      Social Security is insolvent because congress keeps borrowing from the trust fund that we pay into to cover obligations in the general budget. It has nothing to do with shell games. Fundamentally the problem is that the congressional budgets are stealing money from my generation and then blaming the Social Security Administration for mismanaging the trust fund.
  - RHSeeger 6y ago
    If you're going to offer a pension, a guaranteed amount of money in the future, then you should be making sure you can pay it; guaranteed. If making sure you can keep that promise is too burdensome, then you should not be making that promise.
    - 6y ago
pnw_hazor 6y ago
Post Office Pensions: Some Key Myths And Facts https://www.forbes.com/sites/ebauer/2020/04/14/post-office-pensions--some-key-myths-and-facts/ https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p...

SamReidHughes 6y ago

Did you not read the part where they only have to prefund accrued benefits? Oh wait, the article didn't include that part, did it.

addicted 6y ago
Source?
- soldierof4chan 6y ago
  The bill itself describes the funding schedule: https://www.congress.gov/bill/109th-congress/house-bill/6407 https://www.congress.gov/bill/109th-congress/house-bill/6407 Regardless, the “pre-funding” period is over and the fund is running a deficit as retirees are currently paid from it, so it’s a moot point.
  - addicted 6y ago
    “ Establishes in the Treasury the Postal Service Retiree Health Benefits Fund, to be administered by OPM. Requires the Postal Service, beginning in 2007, to compute the net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year” Compute the net present value of future payments does not sound like “accrued” benefits at all. It sounds like future payments which is the opposite of accrued benefits. I don’t know the details of USPS’s finances, but reading that bill it seems they basically got rid of pensions around 2007 “ Postal Civil Service Retirement and Health Benefits Funding Amendments of 2006 - (Sec. 802) Relieves the Postal Service of an obligation to contribute matching amounts to its employees' civil service retirement.” but required that all existing pensions be prefunded. That’s an extremely onerous requirement and whether the fund has been funded or not, it will still affect service drastically. Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now.
    - zaroth 6y ago
      > ... net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year This means you calculate the total amount of added expected additional pension payments earned over the last year of work. So, if last year you could have retired with a pension estimated to pay out $100k, and this year your pension would be estimated to pay out $120k due to the additional year of service, then that number would be $20k. Since that $20k is not paid out all at once, but over a period of time in the future, you calculate the net present value which reduces the amount based on a “discount” rate which is the expected rate of return on your cash. So, $20k paid out over 10 years starting 10 years from now is discounted to, e.g. $14k, which is how much money you need invested today to fully fund that liability in the future. To sum it up, in that hypothetical example, the USPS is supposed to be banking that additional $14k to find the future liability. It’s actually exactly what anyone running a pension program absolutely should be doing.
    - NovemberWhiskey 6y ago
      >it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service In fact, it is somewhat of a moot point - the USPS has been accruing, but not paying. Service is being funded. The USPS actually stopped paying meaningfully to PSRHBF back in 2011. At this point, they're somewhat over $47bn behind in payments. Please take a look at the USPS 10-K to get the fine detail here.
    - soldierof4chan 6y ago
      The other commenters did will to address your misconceptions but I want to further elaborate on this one. > Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now The fund is not paid off as the Post Office never actually made the vast majority of its payments. It's also not in an account waiting to be used. It is being used right now to fund current retirees and it's running deficits. The reason it's a moot point is because even if this requirement were removed today it would operate in the same way i.e. pay as you go.

cwhiz 6y ago

Maybe all cities and states should have to do this? We have a massive pension crisis in the US. Many cities and states are not even 50% funded. It’s a looming disaster.

x86_64Ubuntu 6y ago
Do you not see what it's going to do with the USPS? Why would you want it done with cities and states, unless your goal is to privatize entire cities and states.
- Tyrek 6y ago
  The argument here is that it's all shell games otherwise if the money isn't set aside - e.g. look at the broader trend with social security's solvency. With the way public funding has trended, it would not surprise me if any unfunded programs simply ran out of cash at some point. There isn't an easy answer to balance the needs of existing liabilities (pension commitments) with financial operations - the problem with the USPS was (I believe) the catch-up funding required to meet funding requirements, and not the actual funding itself.
  - jschwartzi 6y ago
    Social Security is insolvent because congress keeps borrowing from the trust fund that we pay into to cover obligations in the general budget. It has nothing to do with shell games. Fundamentally the problem is that the congressional budgets are stealing money from my generation and then blaming the Social Security Administration for mismanaging the trust fund.
- RHSeeger 6y ago
  If you're going to offer a pension, a guaranteed amount of money in the future, then you should be making sure you can pay it; guaranteed. If making sure you can keep that promise is too burdensome, then you should not be making that promise.
  - 6y ago

pnw_hazor 6y ago

Post Office Pensions: Some Key Myths And Facts https://www.forbes.com/sites/ebauer/2020/04/14/post-office-pensions--some-key-myths-and-facts/ https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p...