Posted on 10/04/2018 10:33:12 AM PDT by SeekAndFind
Just when things seemed to be looking up for the Post Office, more bad news comes to darken their doorway. They may be turning a profit in the next couple of quarters, but there’s a financial dark cloud looming on the horizon. Like many state and municipal governments around the country, the USPS offers a generous retirement plan for its workers. Very generous. It includes guaranteed health care coverage for the rest of your life. But a new report at Government Executive reveals a recent audit showing that the pool of available money to pay for those benefits is going to dry up in a little over a decade if some changes aren’t made.
The U.S. Postal Service will run out of money to pay for its retirees’ health care in 12 years if Congress does not take action to address the funding shortfall, according to a new audit of the benefit program.
Funding for former postal employees has long been a sticking point in the fight to get the mailing agency’s finances back on firmer footing, and for the last 10 years USPS has faced a requirement to prefund the benefit for future retirees. USPS has defaulted on many of those payments and the Government Accountability Office now describes the financial outlook of the Postal Service Retiree Health Benefits Fund as “poor.” About 500,000 retirees rely on the program, GAO said, and current law has no contingency plan for what would happen if the agency runs out of money to pay for their care.
So according to the labor agreement set up for the Post Office, they’re supposed to be pre-funding the health care plan for all of their retirees to avoid precisely this situation. But they’ve missed a lot of those prefunding payments, adding up to the tune of $38B. Adding more confusion to the situation is the fact that there’s no provision under current law stating what to do if they run out of money.
Considering that the USPS is lucky to turn even a small profit most years, it’s not as if they’re going to magically generate nearly $40B extra over the next decade. So what do they do then? Come back to the taxpayers looking for another bailout? Somehow I don’t think there’s going to be much support for that in Congress. This could be yet another argument against privatizing the Post Office. Can you imagine what a for-profit private company would do under these circumstances?
Much like state and municipal government workers, the Post Office is struggling under the burden of unreasonable expectations. Fat, generous retirement plans are mostly a thing of the past in this modern economy. Everyone is running on tight margins and facing plenty of competition. Unless you work in one of the loftiest, highest paying positions in the country, expecting your former employer to provide you with a steady income and free benefits for the rest of your life is simply unrealistic. But these types of agreements are in place all over the country and such plans are going bankrupt right and left.
I still think the Post Office could be made more profitable, but it will require new leadership that’s willing to shake things up. For one thing, they should increase the cost of sending out unsolicited junk mail, including political campaign mailers. The big private carriers like UPS and FedEx aren’t going to touch that end of the business with a ten-foot pole. If the USPS raised the junk mail rate by a nickel they would either bring in hundreds of millions of dollars in additional revenue every year or we’d have less garbage in our mailboxes. It’s a win either way.
Problem is can’t put the inter web genie back in the bottle.
Internet killed lettermail.
Deutsche Post was sold to DHL back in the `90s.
No political will for that in the USA yet.
Good.
Our domestic enemies don’t trust USPS for anything more than to screw things up, slow things down, and deliver for Amazon on Sundays.
Most companies charge for delivery. Most businesses do not charge to pick up on site.
The USPS has it backwards! They provide almost free delivery, and charge to pick up onsite.
It's no wonder they cant turn a profit!
Invest in Amazon, UPS, FedEx, DHL. Even if they lose, they win.
If they quit delivering ads they could cut staff in half.
Well they could pass a law where the US Post Office are the only ones who can deliver letters............ never mind.
The new $4 stamps will make everything dandy again !
I am going to repeat the lesson I learned in 2008.
Anybody who shows up in the halls of the US Congress with a sufficiently butt-puckering tale of doom and disaster WILL get a bailout.
Say it with me.
WILL get a bailout.
WILL get a bailout.
This will get “fixed” by having you and I once again kick into the kitty. Don’t kid yourselves.
I run out of health care funding in one month if I don’t pay my invoice. I have the same crisis every month.
My Post Office service is fantastic, and the USPS Informed Delivery Digest is a series cut above anything that FedEx or UPS offers.
Too bad overgenerous pensions are reducing their competitiveness like so many companies with legacy defined benefit plans.
Wonder if this could happen to the Military retirement checks..
Maybe if they got rid of most of their Post Masters, and supervisors, they’d be able to afford it.
My wife took an early retirement, too young to draw from her retirement plan.
Her company bought an annuity to fund her retirement, effective when she turns 65.
Not sure if or how it would work, but I always wondered why more companies don’t use annuities to fund retirement plans.
as an FYI...My uncle is drawing a retirement from the central states teamsters pension fund.
The fund goes down to 0 balance 2025. Obama rejected an alternate plan to keep the fund going.(mostly a reduced benefits plan)
95 percent of the mail I get is nothing but junk and advertising.
Annuities are a terrible investment. That’s why
I’d wager Congress would jam people on military retirement bigly to keep the post office crowd propped up.
Why do I feel like I heard this 12 years ago? And 24 years ago... The truth is they’ll just take the money from somewhere else. It’s all a Ponzi scheme.
Last 100 roll of 1st Class stamps I bought are the Forever kind.
It’s a good thing. The wife will probably drop the roll in my coffin before they shut the lid for the last time...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.