GAO calls on Postal Service to prefund retiree benefits that other private firms are already required to do

  • Posted by a hidden member.
    Log in to view his profile

    Apr 26, 2013 12:24 AM GMT
    It's appalling that there are those in congress who would further indebt future generations of taxpayers with unfunded liabilities - liabilities that many private firms are forced to pay up on.

    So instead of fixing the problem now on the unfunded liabilities, they would rather push a crisis into the future to have the government bailout retirees. It's totally irresponsible.

    http://articles.washingtonpost.com/2013-01-08/politics/36233046_1_fredric-rolando-retiree-health-postal-accountability
  • Posted by a hidden member.
    Log in to view his profile

    Apr 26, 2013 12:28 AM GMT
    For anyone who actually wants to understand the issue instead of believing the half truths and outright lies by some union supporters -

    http://www.cnbc.com/id/45018432

    If these benefits are so onerous to fund now (which are already being discounted to present values), then maybe they shouldn't have them in the first place.
  • tckrguys

    Posts: 133

    Apr 26, 2013 12:15 PM GMT
    What 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.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 26, 2013 1:46 PM GMT
    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.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 26, 2013 2:45 PM GMT
    The financial crisis that Bill Clinton speaks about that has its roots 30 past is the creation of a nanny state that would care for all of us from cradle to grave. To argue against this was to be ( republican) heartless and mean spirited so things like comfortable pensions for government workers , teachers etc ( that could never be funded ) became the norm. Cities, states and the Feds now find their benefit liabilities far exceed their ability to fund them.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 26, 2013 3:12 PM GMT
    Alpha13 saidThe financial crisis that Bill Clinton speaks about that has its roots 30 past is the creation of a nanny state that would care for all of us from cradle to grave. To argue against this was to be ( republican) heartless and mean spirited so things like comfortable pensions for government workers , teachers etc ( that could never be funded ) became the norm. Cities, states and the Feds now find their benefit liabilities far exceed their ability to fund them.


    I in part blame Republicans for poorly communicating the key problem and how the true heartless and meanspirited ones were the politicians and union leaders who pushed these programs that were unfunded and unsustainable. What did they think would happen? That future taxpayers would just bail them out?

    And why should taxpayers bailout retirees who should also have known better? Anyone with a rudimentary knowledge of arithmetic would be able to see that there wouldn't be enough money to pay for retirees.