> are required to pre-fund retiree benefits to a greater extent than other organizations
Because other companies can simply cut the benefits, USPS cannot.
The best explainer I've seen is here: https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p...
> ALL companies are required to fund any pension promises they make to their employees. (...) NONE of them are permitted to take a “pay as you go” approach but must contribute to a pension fund an amount equivalent to what a worker has accrued that year in benefit promises, regardless of how far into the future that worker will be retiring, and must make up for any shortfalls due to asset losses or other reasons. The USPS and private sector companies use the same general actuarial principles to do so, though there are differences in assumptions, particulars of the calculations, etc.
> What is distinctive about the USPS is that, a a result of the 2006 Postal Accountability and Enhancement Act (PAEA), they are also required to pre-fund their retiree medical promises. However, what is also distinctive is that any private-sector company may simply cancel its retiree medical benefits at any time; the funding requirement for the USPS exists because only an act of Congress would enable them to cut these benefits.
> However, even here, again, all companies which promise retiree medical benefits must account for them in their financial reporting even if they don’t prefund.
As well as this line when discussing the USPS Fairness Act, which would eliminate the pre-funding requirement.
https://about.usps.com/news/delivers-facts/usps-delivers-the... [PDF Warning]
> passage of the bill will not reduce our underlying retiree health benefits liability, nor improve our cash flow or long-term financial position.