tckrguys saidWhat is not mentioned in the WaPo article is that the USPS must prefund the retirement fund for 75 years. This is by law for only the USPS, no other private or public firm has to do this. When you have both the union and management in agreement and practically begging congress to change this, you know something is not right and should be changed.
Not true. When you have both the union and management in agreement of a government controlled institution - you generally know it's the taxpayers who are about to be screwed. From the CNBC overview:
"The confusion over 75 years may be due to an "accounting" and not an "actuarial or funding" issue. They only have to fund the future liability of their current or former workforce. This would include some actuarial estimate about the mortality rates of their current workers (I.e. how long they live). So a 25 year old worker would have an average life expectancy (from birth) of 78.7 years. Thus, they would have to project future retiree health benefits for this individual up to about 54 years in the future.
But for accounting purposes they must estimate the future liability over a 75 year period (according to OPM financial accounting guidelines). In this case, they would make some assumptions about new entrants into the workforce and addresses your second question.
Theoretically, these new entrants could include someone who is not born yet. While they have to account for these future liabilities on their financial statements they do not have to fund them if they are not related to their current or former workforce."
So no, they don't have to prefund 75 years worth and even when they do "fund" what they fund of present employees, it factors in a discounted rate to account for some financial return - as private companies must do.