Comment by qserasera | Hacker News Reader

Comment by qserasera | Hacker News Reader

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> If anything, all entities promising retirement benefits should be forced to do it the way USPS does

That would be nice but [insert financing excuse here] others cant do it too.

> Too bad it didn’t apply to governments, because if it did, then my kids and I wouldn’t be stuck paying for labor performed 30+ years ago because all the city and state governments decided they can just promise to pay people with future taxpayers’ money by underfunding defined benefit pension plans and retiree healthcare benefits.

Yes but forcing just USPS to do it was an attack on USPS because it has to compete with private companies. State and local run organizations have no such competition thus 'locally too big to fail'.

I've heard of some interesting talk about making a working USPS federal credit union/bank for a variety of services to the public that might prove lucrative and something that would potentially ease USPSs cash troubles. I'm not an expert into the economics about that and it might prove disruptive to a lot of businesses.

> That would be nice but [insert financing excuse here] others cant do it too.

I don’t know what this means.

>Yes but forcing just USPS to do it was an attack on USPS because it has to compete with private companies.

FedEx and UPS are subject to the same pension and retirement benefit funding requirements as USPS. It’s only government entities that aren’t regulated (because politicians like to be able to pay current employees with future taxpayer money and advertise they are keeping taxes low now so they get elected).

Not letting USPS set it’s prices is what might make it non competitive with UPS/Fedex.

>FedEx and UPS are subject to the same pension and retirement benefit funding requirements as USPS.

No they FedEx and UPS were required to prefund pensions in the 1970s, but they were given 40 years in which to do it.

USPS was given 10 years. In addition USPS was required to prefund retirement medical benefits, and unlike a private company who can cut retirement medical benefits at any time, USPS requires an act of congress to cut retirement medical benefits.

Furthermore, when calculating how much they need to set aside for retirement medical benefits, USPS can only use a much lower interest rate than private companies are allowed to use because they are forced to invest only in T-bills.

I agree the exact terms of funding requirements (10 years) for USPS were politically motivated to weaken it, but the philosophy of funding accrued benefits is sound, and it was long overdue. The same should be required of all entities issuing defined benefit pensions and retiree healthcare.

Also, I find it ridiculous that retirement medical benefits can just be cut anytime, as they are part of the compensation agreement. It's just a fluke of the law that it was never enshrined like defined benefit pensions were.

I don't see where the USPS is required to use T-bill rates to value liabilities in the tex of the PAEA law:

https://www.govtrack.us/congress/bills/109/hr6407/text

>who shall hold membership in the American Academy of Actuaries and shall be qualified in the evaluation of pension obligations, to conduct a review in accordance with generally accepted actuarial practices and principles and to provide a report to the Commission containing the results of the review.

It's another good idea in theory, but the implementation is being controlled and kneecapped by a party/administration that wants it dead, while throwing up their hands and saying "not our faults". A good idea with a bad implementation is in the end just another bad implementation, forget every word before "bad". Good intentions were claimed but they have no basis in fact. The GOP as a whole is corrupt to its core.

The philosophy being sound is worthless if the execution is flawed.

As to investing look at page 35-36. It’s not literally just T-bills, but treasury holdings with very low interest rates compared to the kinds of investments private companies are allowed to make.

https://about.usps.com/who-we-are/financials/10k-reports/fy2...

Interesting, I would like to see the reasoning for why its all just treasury holdings. I don't see anything in the law that would mandate it.

> I don’t know what this means.

That means expanding these requirements to other departments will need sigificant political backing and will be very unpopular. I do view benefit funding requirements as necessary.

> politicians like to be able to pay current employees with future taxpayer money and advertise they are keeping taxes low now so they get elected

looks like you agree with me on that.

> Not letting USPS set it’s prices is what might make it non competitive with UPS/Fedex.

That is an entirely different discussion that would garner my interest.

Banking from the post office is a pretty common thing and makes a lot of sense as it gives people a public, non-profit banking avenue for the poor and under served.

I would agree if there were more post offices, but the USPS has been closing them over the last twenty years to cut costs. They serve wide geographic areas and it is easier to find a local credit union than a post office these days. The poor would be better served with Internet banking.

Many people do not have reliable internet access.

Perhaps a potential USPS credit union would disrupt payday loans.

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