Defenders of the Post Office like to say this, but it is at odds with reality.
The prefunding requirement only requires them to have the NPV value of future payments for everyone who currently or formerly works for them. This is how everyone should accumulate pensions: the alternative is an accounting gimmick in which you promise unsustainable future payments today and then make yourself scarce (or ask for the taxpayer to clean up your mess) when they come due tomorrow.
(The minimum requirement for all employers is that they implement pay-as-you-go, which means that someone's pension should be fully funded at the point where they start drawing benefits. This means that, if you hypothetically have 100k employees who are 5 years from retirement, you can report a pension fund with no assets as fully funded today. This gives you five years to look under the seat cushions for the $25 billion you need to come up with to avoid insolvency. Congress has decided to not let the Post Office implement pay-as-you-go because Congress anticipates that the Post Office will, if allowed to do that, report "The Post Office is profitable on its own revenues and receives no support from the federal government" reliably every year until their pension fund implodes with a 13 figure uncovered liability.)
They're separately required to produce accounting projections for the next 75 years, but those don't have a funding mandate attached to them.
The part most relevant to the discussion is the paragraphs surrounding: "Under current law, PAEA (P.L.
109-435) requires USPS to determine the actuarial present value of future retiree health payments for
current or former employees and to amortize that liability over a 40 year period."
> "This is how everyone should accumulate pensions"
Probably. Yet this is the only group that is required to. And they've been required to make up the difference under a very short timeframe. Should every pension fund be given only 10 years to correct the situation?
> "Congress anticipates that the Post Office will, if allowed to do that, report "The Post Office is profitable on its own revenues and receives no support from the federal government" reliably every year until their pension fund implodes with a 13 figure uncovered liability."
And why is the Post Office singled out for this concern?
Are other government profit centers treated the same way? Perhaps the Patent Office?
The prefunding requirement only requires them to have the NPV value of future payments for everyone who currently or formerly works for them. This is how everyone should accumulate pensions: the alternative is an accounting gimmick in which you promise unsustainable future payments today and then make yourself scarce (or ask for the taxpayer to clean up your mess) when they come due tomorrow.
(The minimum requirement for all employers is that they implement pay-as-you-go, which means that someone's pension should be fully funded at the point where they start drawing benefits. This means that, if you hypothetically have 100k employees who are 5 years from retirement, you can report a pension fund with no assets as fully funded today. This gives you five years to look under the seat cushions for the $25 billion you need to come up with to avoid insolvency. Congress has decided to not let the Post Office implement pay-as-you-go because Congress anticipates that the Post Office will, if allowed to do that, report "The Post Office is profitable on its own revenues and receives no support from the federal government" reliably every year until their pension fund implodes with a 13 figure uncovered liability.)
They're separately required to produce accounting projections for the next 75 years, but those don't have a funding mandate attached to them.
http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/...
The part most relevant to the discussion is the paragraphs surrounding: "Under current law, PAEA (P.L. 109-435) requires USPS to determine the actuarial present value of future retiree health payments for current or former employees and to amortize that liability over a 40 year period."