Was curious: "marketing" mail was 18% of USPS revenue[1] (2020) and dropping. Low share of total earnings compared to Meta, Google, and soon Amazon's ad revenue.
[1] https://about.usps.com/newsroom/national-releases/2020/1113-...
It is interesting, because shouldn't the expectation be that a pension be funded as the benefits accrue? That seems like the safe sustainable way to run things.
like what? The ones I heard of were prefunding the pension plans, but I’m not sure how that benefits any of “their donors”
You can't see how kneecapping the USPS might help FedEx, UPS, and Amazon?
The point of making the USPS pre-fund their pension obligations was to be able to turn around and say "look at the horrible state of their finances, government is clearly so inefficient, we should privatize it".
The reason governments can offer ridiculous post employment benefit obligations, such as above average defined benefit pensions and retiree healthcare, is that the laws governing funding for these benefits only applies to non governmental entities.
Not a surprise that politicians exempted governments from the same funding rules, opting instead to kick the can down onto future taxpayers and opt for offering voters lower taxes now. The real question is why only the USPS was asked to fund accrued benefits, and not every single other governmental entity in the US.
> Unlike any other public or private entity, under a 2006 law, the U.S. Postal Service must pre-fund retiree health benefits.
>Other federal agencies and most private sector companies use a “pay-as-you-go” system, by which the entity pays premiums as they are billed.
There are very strict rules about how non governmental employers have to calculate deferred compensation liabilities, and how much funding they have to have. The relevant laws are ERISA 1974 and PPA 2006. Once the deferred compensation is accrued, the employer must value the liabilities using certain yield curves for high grade corporate bonds and maintain certain funding levels. It is why private employers stopped offering pensions, it is exorbitantly expensive if you properly account for it, especially with increasing lifespans.
I do not know what USPS means when it says "pre-fund", but the text of the USPS funding law is here in section 802. To me, it indicates that money needs to be set aside for accrued benefits (from the wording "future payments required"). I also do not know if USPS is true in its claims that non government entities do not have to fund retiree healthcare benefits. I am pretty sure it would be covered by ERISA and PPA 2006, just like defined benefit pensions are, OR retiree healthcare benefits are not protected by law and if a company wants to stop paying them, they can.
https://www.congress.gov/bill/109th-congress/house-bill/6407...
>`(d)(1) Not later than June 30, 2007, and by June 30 of each succeeding year, the Office shall compute the net present value of the future payments required under section 8906(g)(2)(A) and attributable to the service of Postal Service employees during the most recently ended fiscal year.
Section section 8906(g)(2)(A) is:
https://www.law.cornell.edu/uscode/text/5/8906
>(A) The Government contributions authorized by this section for health benefits for an individual who first becomes an annuitant by reason of retirement from employment with the United States Postal Service on or after July 1, 1971, or for a survivor of such an individual or of an individual who died on or after July 1, 1971, while employed by the United States Postal Service, shall through September 30, 2016, be paid by the United States Postal Service, and thereafter shall be paid first from the Postal Service Retiree Health Benefits Fund up to the amount contained in the Fund, with any remaining amount paid by the United States Postal Service.
> Rather, pursuant to OPM’s methodology, such payments would be projected to fund the liability over a period in excess of 50 years, from 2007 through 2056 and beyond (with rolling 15-year amortization periods after 2041). However, the payments required by PAEA were significantly “frontloaded,” with the fixed payment amounts in the first 10 years exceeding what actuarially determined amounts would have been using a 50-year amortization schedule.
> We also reviewed the prefunding requirements for other organizations that offer retiree health benefits to their employees: private sector entities, state and local governments, and other federal entities. Although other federal, state and local, and private sector entities generally are not required to prefund retiree health care benefits, a few do prefund at limited percentages of their total liability.
> For example, Standard & Poor’s (S&P) reported that 126 of the 296 companies in the S&P 500 that offered “other post-employment benefits” (OPEB)64 prefunded some percentage of the associated liabilities, while the USPS OIG has reported that 38 percent of Fortune 1000 companies that offer retiree health care benefits prefund them, at a median funding level of 37 percent.
I would agree that politicians did try to handicap USPS probably to benefit UPS/FedEx. I would also say every entity, government or non government, should be required to fund future promises today, otherwise it should be listed as debt on the balance sheet.
Deferred compensation is used too easily to shift costs from today into the future and keep those costs off the books, either by not accounting for them at all or undervaluing them.
Is there a sector/program in the gov't where that isn't the case? Every entity that is created is just a new fiefdom to expand and lord over from the time it's created to infinity.
USPS is profitable because we all accept the idea that companies are allowed to pay somebody to load literal trash through a hole in the side of my house.
This can be fixed. In France for example, it’s illegal to put junk mail in a mailbox that has a “stop pub” (= no junk mail) sticker on it. I have one, and as a result <5% of my mail is junk mail.
It did to me! I received about a dozen packages ordered from Russia/China and this stopped only after escalating with customer support to the point of cancelling my Amazon account.
> also have the protection of law to keep them going.
The law is actually what makes them weaker. Do some light research on why the USPS is not 'profitable'.
> More than 95% of my mail is junk mail and there's nothing I can do about it.
There is something you can do about it. See https://www.consumer.ftc.gov/articles/how-stop-junk-mail.
The USPS is a service, not a corporation, it shouldn't turn a profit. Does the army turn a profit? Or the navy? Why isn't anyone talking about the ATF 'losing' 1.2 billion a year while having overlapping responsibilities with countless other TLAs? How much money is our Coast Guard making us? Perhaps we should privatize the Coast Guard. Just saying..
As someone who didn't grow up in the US I never really understood the hate the USPS is getting. They've been systematically fucked by both sides of the political 'divide' and yet they still deliver my election ballot on time. They aren't even allowed (see both sides of the political divide) to set their own package prices, yet there is this continuous annoying stupid propaganda that they need to be profitable.
It's fine. in 20 years (if we survive as a country by then) when A-Z Epistle™ by Prime™ will be the only mail carrier for $9.99/month (or bundled with your Prime membership). They'll definitely find a constitutional loophole to make that happen.
Next time someone asks why the USPS isn't profitable, I'd gladly invite you to explain to me what is our ROI for the $83 billion spent sustaining the Afghan government.
Its incredible how many people support this horrible service and think selling stamps makes it profitable.
Now I just bin everything that's not first class, directly addressed to me by name before I even bring it into the house.
Give it 10 years when Amazon is looking for new ways to increase profitability and shit's shipped to your door that you have to schedule a ship back or you'll end up being charged for it.
Their equivalent are the ads you get on their home page or when you search for things.