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>FedEx and UPS are subject to the same pension and retirement benefit funding requirements as USPS. No they FedEx and UPS were required to prefund pensions in
by learc83 6y ago
>FedEx and UPS are subject to the same pension and retirement benefit funding requirements as USPS.
No they FedEx and UPS were required to prefund pensions in the 1970s, but they were given 40 years in which to do it.
USPS was given 10 years. In addition USPS was required to prefund retirement medical benefits, and unlike a private company who can cut retirement medical benefits at any time, USPS requires an act of congress to cut retirement medical benefits.
Furthermore, when calculating how much they need to set aside for retirement medical benefits, USPS can only use a much lower interest rate than private companies are allowed to use because they are forced to invest only in T-bills.
- lotsofpulp 6y agoI agree the exact terms of funding requirements (10 years) for USPS were politically motivated to weaken it, but the philosophy of funding accrued benefits is sound, and it was long overdue. The same should be required of all entities issuing defined benefit pensions and retiree healthcare. Also, I find it ridiculous that retirement medical benefits can just be cut anytime, as they are part of the compensation agreement. It's just a fluke of the law that it was never enshrined like defined benefit pensions were. I don't see where the USPS is required to use T-bill rates to value liabilities in the tex of the PAEA law: https://www.govtrack.us/congress/bills/109/hr6407/text https://www.govtrack.us/congress/bills/109/hr6407/text >who shall hold membership in the American Academy of Actuaries and shall be qualified in the evaluation of pension obligations, to conduct a review in accordance with generally accepted actuarial practices and principles and to provide a report to the Commission containing the results of the review.
- stjohnswarts 6y agoIt's another good idea in theory, but the implementation is being controlled and kneecapped by a party/administration that wants it dead, while throwing up their hands and saying "not our faults". A good idea with a bad implementation is in the end just another bad implementation, forget every word before "bad". Good intentions were claimed but they have no basis in fact. The GOP as a whole is corrupt to its core.
- learc83 6y agoThe philosophy being sound is worthless if the execution is flawed. As to investing look at page 35-36. It’s not literally just T-bills, but treasury holdings with very low interest rates compared to the kinds of investments private companies are allowed to make. https://about.usps.com/who-we-are/financials/10k-reports/fy2018.pdf https://about.usps.com/who-we-are/financials/10k-reports/fy2...
- lotsofpulp 6y agoInteresting, I would like to see the reasoning for why its all just treasury holdings. I don't see anything in the law that would mandate it.