Re:The Billionaire Behind Efforts to Kill the U.S. Postal Se...
by coliveira on Tuesday July 21, 2020 @09:23PM
(#23912968)
The lie in this article is hidden here: "though there are differences in assumptions, particulars of the calculations..."
Companies need to fund their pension plans, but only for the portion of time the worker has been employed by them. For example, for FY 2020, the company needs to set aside money corresponding to an additional year of work. But for the USPS, the law requires it to set aside money assuming that the worker will work his entire career for USPS, and project all retirement costs 75 years into the future, even for workers that they haven't even hired yet. In actuary, this is the difference between "actual vested liability", and "total projected liability". The result is clearly absurd. Moreover, this money is not staying in USPS retirement accounts, is going to the government. So it doesn't even guarantee that the money will be there for USPS workers. To add to the injury, USPS is allowed only to invest on treasury bonds, which means that they need to raise even more money than a private company, which is free to invest in any high grade bond.
Companies need to fund their pension plans, but only for the portion of time the worker has been employed by them. For example, for FY 2020, the company needs to set aside money corresponding to an additional year of work. But for the USPS, the law requires it to set aside money assuming that the worker will work his entire career for USPS, and project all retirement costs 75 years into the future, even for workers that they haven't even hired yet. In actuary, this is the difference between "actual vested liability", and "total projected liability". The result is clearly absurd. Moreover, this money is not staying in USPS retirement accounts, is going to the government. So it doesn't even guarantee that the money will be there for USPS workers. To add to the injury, USPS is allowed only to invest on treasury bonds, which means that they need to raise even more money than a private company, which is free to invest in any high grade bond.
https://www.businessinsider.com/usps-rise-fall-post-office-c...