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CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2
reply to skeechan

Re: Here's a better way to fix the Post Office...

said by skeechan:

There is always need for a dying business to pre-fund a bloated and unsustainable pension system particularly when its failure would ultimately end up being made whole by the taxpayers.

The USPS can't be trusted to be responsible.

If a business knows it is dying what would be the point of pre-funding pensions for people that don't even work there yet? Just don't hire more people. As we can clearly see here, the added burden of pre-funding that far into the future can put a business so far into the red that it is deliberately killed. The post office was not 'dying' before this requirement. They have had their ups and downs like any business but overall they are highly profitable.

@andre2 - It depends on if you are talking about the fund (which considers people's hire dates) or the people (which considers their retirement dates). The law (and my explanation) is addressing the fund. The fund, as you pointed out, was to be financed 50 years into the future (until 2056). That will cover people who retire between 2006 and 2081 (75 years into the future). It is not proper to say the fund needed to be financed 75 years into the future because that would cover people retiring up until 2106. No matter how you slice the numbers, it is a ridiculous requirement that is directly responsible for the post offices' 'losses' since 2006 (two years before the recession started). Revenues were increasing in 2006 & 2007 but the law pushed operating expenses above revenues even in those years. True, in 2008 the recession made it worse but this is a result of the law... not the recession.