Hacker News Reader

Hacker News

Comment by austenallred | Hacker News Reader

Parent Full thread

austenallred

>Which is wildly successful and doesn't cost us taxpayers a dime

You might want to double check your info on that one. The US Postal Service lost $32 Billion over the past four years.

USPS losses:

* 2011: $5.1 Billion

* 2012: $15.9 Billion

* 2013: $5.5 Billion

* 2014: $5.5 Billion

2011/2012: http://money.cnn.com/2012/11/15/news/economy/postal-service-...

2013: https://about.usps.com/news/national-releases/2013/pr13_087....

2014: https://about.usps.com/news/national-releases/2014/pr14_059....

View on HN

My understanding was that almost all of that is due to the insane benefits and pension requirements placed on the USPS in 2006. Happy to be corrected if I'm offbase.

The same ones private corporations are required to follow.

The US doesn't require private corporations to offer a pension at all. If they do voluntarily, it's almost always a 401k. The USPS' pension funding forced on it by a "starve the beast" Congress is much different.

The US gov't sure as hell requires private corporations with pensions to make sure they are fully funded. The pension might be optional, but running an underfunded one is not.

Really?

From http://www.nytimes.com/2012/07/21/business/pension-plans-inc...

"AFTER years of poor investment returns, the pension funds of the United States’ largest companies are further behind than they have ever been.

The companies in the Standard & Poor’s 500 collectively reported that at the end of their most recent fiscal years, their pension plans had obligations of $1.68 trillion and assets of just $1.32 trillion. The difference of $355 billion was the largest ever, S.& P. said in a report.

Of the 500 companies, 338 have defined-benefit pension plans, and only 18 are fully funded. Seven companies reported that their plans were underfunded by more than $10 billion, with the largest negative figure, $21.6 billion, reported by General Electric."

Private corporations are not held to the same standard as the USPS for pension funding.

As the article you linked says, they're underfunded because the investments didn't perform as well as expected.

If there's something else to it, by all means feel free to state precisely the difference between how these pension funds from the random article you googled operate, and the USPS's requirements. There might be, but the article you linked doesn't imply that.

Show me a private corporation that is legally required to fully pre-fund pensions 75 years in advance for every employee, including all potential future employees, and I'll eat my hat.

That's not what the USPS is required to do.

What's insane about the requirements? They actually have to pay for what they promised?

They have to pre-pay 75 years worth, including future employees

It's not 75 years and it's not for future employees.

http://www.washingtonexaminer.com/unraveling-the-myth-that-t...

50 years still seems like a lot, but I'm not from the US, so I don't know whether it really is for pre-paying health benefits?

it's 50 years, which is functionally equivalent in the insanity. Imagine if you had to pay 50 years of taxes upfront

The reason that was put into place, is that if they don't fund those pensions now, there will be no ability to do so in the future - their business is evaporating.

The business may be evaporating, but the service is going to continue. It turns out that getting documents and packages to any given citizen is really, really important for the function of governance.

In many ways, stripping the post office of their monopoly had the opposite of the intended effect, because it removed the pretenses that let people pretend that it was somehow magically different and special compared to other essential government services just because it sold stuff.

If they held off on paying those obligations until later, they'd be unable to pay them. It's that simple. The math would not have worked out. Reduce the size of their business by 1/3, increase the size of obligations substantially due to employees retiring and drawing against those pensions, and it becomes a very large tax payer funded pension plan.

The USPS has already become increasingly dependent on commercial spam mail to keep going.

You are correct, it was insane - no other corporation is required by law to act in that way: http://thinkprogress.org/economy/2011/09/28/330524/postal-no...

So, an average of approximately $65 per taxpayer per year. I'm personally ok with that.

The USPS started operating at a loss because Republican lawmakers passed the Postal Accountability and Enhancement Act, signed into law by George W Bush, requiring the USPS to prefund retirement benefits.

http://about.usps.com/who-we-are/financials/annual-reports/f...

http://www.bloomberg.com/news/articles/2012-08-02/understand...

Reply on news.ycombinator.com