I agree with this, and this attention needs to come in more ways than extra $$. As others said, USPS is stuck in a weird state: need to be self-funded with no authority to set prices. So the gov't needs to either subsidize some things or let USPS compete.

However, to fix USPS some of that attention needs to come in the form of hard kicks and forced reorgs. USPS is a dinosaur with a lot of inertia against improving efficiency and modernization. That causes problems, costs a lot of money and drives customers away. USPS is also notorious for advocating for spam senders (who give USPS a lot of revenue) and against people they are supposed to serve. Those are all problems that external "attention" should resolve.

As an anecdata, I was occasionally involved with field testing campaigns which include significant shipping for next day delivery a couple of thousand miles away (something would break or some new hardware would be needed and will be shipped from home ASAP). This provides a non-insignificant revenue to the shipper. We tried USPS, but it just did not work. With FedEx we get accurate, near real time package tracking, so the minute the package is dumped at our hotel we see it and someone can drive out and pick it up. With USPS, their system was showing delivery at the end of the following day. Maybe something changed in the last few years, but I doubt it.

If they didn't have to prepay pensions (something no other government agency, or private company in the world is required to do, or does), they'd be in great shape.

"The confusion over 75 years may be due to an "accounting" and not an "actuarial or funding" issue. They only have to fund the future liability of their current or former workforce.

https://www.cnbc.com/id/45018432

1. Pre-fund the pensions of employees who aren't born yet

OR

2. Stop offering the pension before they hire the people who haven't been born yet

Some companies chose to do 2, but without an act of congress the USPS is locked into option #1. This is tautological for any long lived pension plan. It will eventually serve people who haven't been born yet. I don't see why people are so surprised by it.

> If you're promising it, you should book the expense's present discounted value.

Your argument proves way too much. There is no "promise" here. To whom is the commitment made? The beneficiaries of such pensions do not even exist at this time. The most you can say is that there is an expected future expense. But if your claim is that an entity should be presently setting aside money for all anticipatable expenses, no matter how far in the future, then I think you'll find very few CFOs to agree with you.

It is absolutely standard for corporations to be required to fund their pensions, and to include liabilities on their balance sheet that aren't due for 80 years (in what few cases those actually happen in). Edit: Do you know of a rule whereby e.g. such bonds can be left off the balance sheet? I don't.

If other federal agencies (which are different in many other ways) aren't required to fund pensions, they should be -- I agree.

>Your argument proves way too much. There is no "promise" here. To whom is the commitment made?

The workers, to provide pensions for their dependents.

>The most you can say is that there is an expected future expense. But if your claim is that an entity should be presently setting aside money for all anticipatable expenses, no matter how far in the future, then I think you'll find very few CFOs to agree with you.

It's not an "anticipatable" expense, it's one that you have specifically committed to as compensation for labor, every bit as "anticipatable" as having to make this month's payroll. Do you know a CFO that thinks it's fine not to have allocated money for that?

I can't know the state of mind of any CFO. What can I do is look at the record and find companies that have failed allocate money for that. There's no shortage of them in the USA.

This is from 2003, but is fairly indicative of the games played:

https://www.abi.org/abi-journal/underfunded-pension-plans-a-...

Here's a 2017 summary of state public pension funds

https://taxfoundation.org/state-public-pension-plan-funding-...

Here's some 2019 reporting on corporate pension shortfall and congressional efforts (!) to help mitigate the damage to individual pensioners:

https://www.cnbc.com/2019/07/12/these-pension-plans-are-at-r...

So regardless of whether or not it is "absolutely standard for corporations to be required to fund their pensions" (and I don't believe that it is anywhere near as standard or required as you portray it), the facts on the ground are that there are many, many pension funds that are underfunded by many different metrics.

I can also look at the record of corporate bankruptcy proceedings, and note how the obligations towards pensions are handled in comparison with those towards other types of debtors. TLDR: not well.

Finally, there is no specific committment by corporations to pay into a pension fund, only to pay out. They are at liberty to play whatever games they want regarding paying in. The simplest is to declare assumptions about future revenue, and pay in less (or nothing) in the present.

>I can also look at the record of corporate bankruptcy proceedings, and note how the obligations towards pensions are handled in comparison with those towards other types of debtors. TLDR: not well.

Well, yes, that's a reason to require the pensions to be funded (at present discounted value), as the benefits are accrued -- why are you bringing this up to oppose that requirement on the USPS, except to condemn those workers to that possible fate?

>Finally, there is no specific committment by corporations to pay into a pension fund, only to pay out. They are at liberty to play whatever games they want regarding paying in.

This is false; among other places, see the Forbes overview. Many reforms have been enacted and the PBGC has requirements. This isn't the 50s anymore.

https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p...

But there are bunch of games corporations can play to reduce or avoid minimum contributions. Principle among them is to fund too much of the plan via contributions of the company's own stock (limited in scope but large enough to underfund the plan). If the underfunding is limited to 90% of the fund's liabilities, it can take 3 years before an increase in funding is required.

But rather than focus on the rules, I prefer to look at the actual on-the-ground situation. Many corporate DB plans are underfunded. It's not enough to say "the rules say they must fund liabilities as they are accrued" when many corporations demonstrably fail to do this.

Anyway, most people recognize that corporate DB plans are more or less over, so the comparison between corporate pension provisioning and public versions is going to get less and less relevant (probably).

That's…not true? https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p...

The issue for the postal service is that the law was changed so that the USPS would start funding their retirement health care costs since they are promised to the workers and the projected costs had exploded. This was supported by a bipartisan commission, the GAO, and the Postal Service itself:

>...Although retiree health benefits are often unfunded or poorly funded, two considerations suggested the Service’s retiree health care obligations should be funded: they are as firm a commitment as the Service’s pensions, and they had become enormous (about $75 billion by 2006). In 2003, the presidential commission suggested establishing a reserve fund for these obligations, and the Postal Service itself sent Congress a proposal for creating such a fund.

>Prior to 2006, the Service simply paid retirees’ health benefit premiums when they came due. The Service put aside no money when it promised the future benefits. Paying benefits when they come due rather than funding them in advance is known as the pay-as-you-go or unfunded approach.

>Early this century, Congress, the Administration, the U.S. General Accounting Office (GAO), and a bipartisan presidential commission expressed concern about the lack of funding. Although retiree health benefits are often unfunded or poorly funded, two considerations suggested the Service’s retiree health care obligations should be funded: they are as firm a commitment as the Service’s pensions, and they had become enormous (about $75 billion by 2006). In 2003, the presidential commission suggested establishing a reserve fund for these obligations, and the Postal Service itself sent Congress a proposal for creating such a fund.

>In 2002-2003, it was discovered that the Service was contributing far more than necessary to fully fund its pensions, and Congress allowed the Service to contribute less. Congress decided the pension “savings” could help patch the retiree health benefit underfunding. In 2006, as part of the Postal Accountability and Enhancement Act (PAEA), the Postal Service Retirement Health Benefits Fund (RHBF) was established. Most of the Service’s contributions to the new fund could be paid using the pension “savings.” PAEA was bipartisan legislation with broad support.

https://taxfoundation.org/postal-service-reform-postal-servi...

>...If they didn't have to prepay pensions (something no other government agency, or private company in the world is required to do, or does), they'd be in great shape.

In relation to this, the USPS has posted this as part of a fact sheet:

>...More recently, the USPS Fairness Act was passed by the House. It would eliminate the requirement to prefund retiree health benefits and forgive our current defaulted prefunding payments. However, ultimate passage of the bill will not reduce our underlying retiree health benefits liability, nor improve our cash flow or long-term financial position.

https://about.usps.com/news/delivers-facts/usps-delivers-the...

I haven't seen evidence of this, in fact I think it's just coming back to the lack of funding. USPS is a bit of a dead-end job due to how limited its lifespan is (continued calls to defund it from the right) and in its current state it isn't really attracting talent. If the US cared about its post service it could be revived and greatly improved.

Also, just FYI, you folks have it great. I'm a US expat in Canada and CanadaPost is comparatively terrible - it's slow, expensive, and most package delivery happens through the third party companies (like FedEx, UPS, Purolator, DHL whatnot) which are absolute trash up here - without USPS constantly raising the bar the independent delivery services routinely lie about delivery attempts, refuse to deliver to addresses and re-route packages miles away when they have offices down the street.

Since moving up to Canada I've been pretty wowed by the healthcare, but the mail system up here is terrible. I think there are some intensely dedicated souls in USPS still that have managed to keep everything going on their shoestring budget, but they're eventually going to retire and the defunding will probably be capped with USPS being privatized for "costing the tax payers money".

It's okay though - delivery service in DC will be great. And USPS will be the latest example of "failed socialism" and held up as the Dems mismanaging budgets.

UPS is renting UHauls in my area to replenish delivery trucks in the field. Drivers are working OT as late as 9PM.

USPS isn’t backfilling positions or using OT hours!

Intentional mismanagement due to ideology and greed.

https://fortune.com/2020/07/24/usps-mail-delivery-postmaster...

> The Postal Service is a joke,” said the President in May.

> “Every time we’ve slowed down mail, we’ve lost revenue,” said Dimondstein. The new postmaster general, he said, instituted sweeping policy change after just one month in his position and without consulting any unions or representatives with deep institutional knowledge.

> “These changes are happening because there’s a White House agenda to privatize and sell off the public Postal Service,” said Mark Dimondstein, president of the American Postal Workers Union.

On the other hand, I hear this used as a fully general explanation for every messed-up public service, including ones in places like the Bay Area, where government-run services are usually run very poorly and Republicans have near-zero influence. And there are so many other reasons why a public service is likely to end up poorly run eventually: bad incentives, otherwise-good incentives that don't incentivize their own preservation, accumulation of increasingly heavyweight bureaucracy and procedures, gradual transfer of power from leaders who know how to do new things to leaders who only know how to do the same things, and so on. Blaming everything on political sabotage doesn't seem like a great fit.

(Maybe in the case of the USPS it really is a case of political sabotage, but this is why I'm skeptical of those claims in general.)

Anecdotal stories should be taken at a grain of salt, but I've heard more complains about package delivery in the last couple weeks from people who didn't know anything about the political rumblings at USPS, and that combined with the recent appointment news makes me doubt that it's just a coincidence.

[1]:https://www.washingtonpost.com/business/2020/07/14/postal-se...

Unions: They're Actually A Good Thing.

I've seen tweets of e-tailers saying some packages (very small+light first class... the kind that are only cost effective thru USPS) are taking weeks when they used to take 1-4 days.

Unless USPS magically becomes more efficient in the next 100 days, their backlog of work will grow and non-prioritized deliveries will fall further behind. It will especially hurt voting is Amazon (or other packages) have higher delivery priority than ballots and ballot materials (usually 4+ items per voter per election).

Now, they stop working after 8 hours in most cases and leave whatever is left in a pile to be done later. Just like with computers, when you develop a backlog in a system optimized for throughput, things tend to get worse.

1. Probably nothing technically illegal has happened

2. Nobody's mail-in-vote will arrive in time to be counted

This coupled with the fact that those rabid Trump fans will be showing up at the polls in person might[1] be enough to tip it in his favor.

1. It still might not be enough though, he is doing hilariously abysmally in polls.

They explained it was basically christmas holiday load, without the extra staff, with less staff on a non busy time (people taking covid related time off for sickness and family).

Seems they caught up on international (from china) customs backlog.

Ordered in March, came early June.

Recent ordered in July, got china package in 2 weeks

Specifically it's the guy who got $700 million in stimulus loans for a trucking business that was only worth $70 million.

https://www.salon.com/2020/07/01/former-ceo-of-troubled-truc...

As anyone could have easily seen coming, Trump used the stimulus money like a slush fund and this guy was paid to destroy USPS in general and specifically to screw with mail-in ballots during the election.

https://fortune.com/2020/07/24/usps-mail-delivery-postmaster...

Not projecting into the future and instead trying to hold the pricing ceteris paribus was either a major oversight or corruption

Yes, you can submit a FOIA request to the USPS requesting the contract.

https://www.foia.gov/

Understandable reason. Redacting only the "necessary" bits might well render the document unreadable.

I've heard the deal with Amazon is bad, and the new Postmaster General is trying to renegotiate it.

In my experience, no Priority or First Class packages were delayed in favor of Amazon packages, but the flood of Amazon packages did overburden the system causing some delays. From what I understand, USPS is receiving more Amazon, because more people are shopping online (Covid) and because Amazon is (was?) dealing with a labor dispute. A couple weeks back my station got absolutely hammered - received about triple the typical Amazon volume on back-to-back days. The clerks have to sort each package to the appropriate routes, and then the carriers have to deliver all those packages. As they're out delivering, they're picking up packages to bring back to the station, and those are the packages that were subject to delays.

In general, everything goes out every day, and even if one package is left behind, someone has to drive that package to the plant. From a business standpoint, this doesn't make a lot of sense, but it's part of the service culture at USPS, and clerks and carriers are horrified and mortified to hold up mail, which is why you see complaints like the one from the carrier in the article.

At the same time, USPS was rolling out some new policies, and they're missing a lot of people due to Covid, so a lot of factors converged to make the situation difficult. But, at my station, no mail has been delayed for weeks. I can't speak for the plants, but the vast majority of Amazon packages are delivered to the stations as drop shipments, so if the plants are having issues with volume, it's not because of Amazon.

During Covid, letters and flats had been down in volume (businesses being closed = less advertising) by somewhere between 25% and 40%, but they appear to be back to normal, and parcels had been up something like 60% overall.

I think that's most of the pertinent information. But, I'll say that this is typically the time of year where many USPS employees exhale a bit. The overtime dwindles, and the pace slows. Instead, much of this has felt like Christmas - anyone on the OT list and any non-career employees are working lots of hours to keep up with demand, and sometimes they're even compelling people not on the OT list to work OT. So, it feels like the holiday season never stopped, and we're all pretty exhausted. Of course, we feel lucky to have been able to work through the pandemic, but it's taken its toll, as well.

Possibly, if you shipped a product thru that one individual post office, it might have arrived a day late. Not surprising you haven't noticed the problem, because there isn't one.

https://www.washingtonpost.com/business/2020/07/14/postal-se...

I expect delivery times will go sideways again in Q4.

This is exactly the way a utility works.

Maybe we should make more utilities be prepared like the USPS.

[x] In the west big tech can more or less serve 98% of the population. but there is (approx) 2% of the population who for various reasons are massively uneconomic to serve - mentally, ill, disabled, poor, lacking literacy skills or the wrong language. Hell its probably more than 2%. But the point is Government must serve these people and provide a level playing field. Commercial companies dont have to.

There certainly would be an additional marginal cost, but it would be much, much less than an entity trying to start that from zero.

https://www.dfs.ny.gov/consumers/banking_money/basic_bank_ac...

Do you mean even cheaper and less frills than that?

https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...

How can it act as both a public service and source of free money? Even if it made a small profit doing so, it would be less than ramping up their most profitable areas and would have an opportunity cost.

(If you mean they should do it purely as a public service, that's a fair point, but you're writing like it's an easy way to improve their financial position, which doesn't make sense.)

Most of the reasons that it isn't profitable relate to problems that the USPS already has to solve as part of their core function. It doesn't make sense for a bank to invest in physical infrastructure in the middle of nowhere, the cost of the building would erase any potential profit. The post office already has a building there though (and staff, etc). A significant amount of the up front expense, as well as a decent chunk of the ongoing expenses, is already going to be spent anyway.

So for these five or six people in rural areas that can't get a bank account, and aren't complete deadbeats, and can't get to a bank as easily as they can get to a post office, the USPS has a cost advantage in serving them. Okay. I just don't see numbers that make this a big source of free money.

Edited to add: Wealthy privileged HN readers would not know this, but poor people who are "unbanked" have to use USPS money orders to pay bills, and the USPS charges a fraction of one percent on money orders. So yes, the USPS is already performing banking functions.

Using a bank as a poor person is stupid expensive. Have less than 200$ in an account? That's a monthly fee. Use your debit card less than 15 times last month? That's a fee. Need checks for that account with only $100 in it? Most people get them for free but you pay. For a time, TD Bank was even applying transactions to your account out of order so you would incur more than expected overdrafts and accrue more overdraft fees than you actually should have had. They lost a court case about that and had to pay people a few dollars, because class action suits are a travesty of justice often.

With a $15/month charge for having less than $1000 in the account per month.

With a destroyed credit history when Wells Fargo and BoA continue their stock value pumping shenanigans and opening accounts in your name.

In the past USPS has been evaluated as "thing that should make money" which is silly - if it was profitable to run a reliable service in that space the commercial sector would have forced out the government.

Prime changed from being "We're going to have the package to you in two days" to "We'll get it to you in two days, if we feel like it and it's convenient and inexpensive for us to do so".

Repeatedly, lately, I've bought items based on delivery times only to receive updates a few hours later pushing the delivery times back by days. It's one thing to have an exceptional circumstance during delivery, and quite another to change the committed (was it really?) delivery time within a few hours of the purchase decision.

Yeah, COVID, I get it. But it's not just COVID.

My personal experience is the opposite: times were heavily impacted peak-COVID, but now are returning to the very fast times, and are often same-day (!) or next-day delivery.

The only times I see times being pushed back now is when they ship by UPS via a program where UPS takes it from Amazon and gives it to the USPS for last-mile. These can take 4-5 days.

But if Amazon's delivery drivers are handling it, which is most of the time for me, it's very fast.

This isn't meant to invalidate others' experiences. But I wonder what the difference is. My experience is in an urban area.

I often go out of my way to avoid Amazon for my online purchases now.

In Europe we have this system where public deals above a certain cost are open for everybody. If you meet the requirements best, you win the deal. Problem with this system is that the requirements are rarely written down properly, causing half-baked solutions meeting bare minimums and extra costs to fix them. For example, that is why we Europeans are unable to produce proper governmental IT systems, or buy new trains that won't break down due to cold weather.

Here is an article with more details.

https://www.google.com/amp/s/www.cbc.ca/amp/1.1135699

The point that they are now profit seeking private or not is true.

There is a massive difference between a Crown Corporation running as a for profit enterprise where any profits return to the Crown and a privately owned company, especially one that was "spun off" and privatized at pennies on the dollar.

Tangentially I've heard stories of mail being purposely held back a day, to support that narrative of discontinuing Saturday delivery that was being pushed 5-10 years ago. This agency has been getting politically strangled for quite some time.

1. His last film in 2016 won the Palm d'Or at Cannes if that means anything.

Further, private carriers can search your mail. The USPS can't but FEDEX can...

Why is this even a painpoint ? How much funding does Fedex or UPS get from government to stay operational ?

I find it surprising that USPS remains operational at such massive scale while being a cash sink for American taxpayers. Putting more money in this sinkhole is unlikely to yield better results. If US government makes it legal for other carriers to carry letters (which is illegal at this point) the need for USPS would be much lesser. USPS could then focus more on rural and underserved communities and negotiate contracts with Fedex/UPS etc.

These micromanaging mandates include schedule of delivery, the breadth of service area (which frequently must include the least profitable places to deliver), micromanaging of every price increase, and restrictions that the USPS can't move into other businesses that might encroach on their lobbyist-buddies clients (eg. paycheck cashing, which USPS used to do). I can't make sense of how much the 75-years pension prepay is catching up from insufficient coffers (perhaps justifiable) and how much of it is just punitive to keep the USPS from running efficiently and being able to use more of its debt for capital improvements.

According to WSJ, UPS added delivery surcharges in May due to COVID's impact. The only reason USPS can't do the same to manage the supply/demand curve changes is because Congress is somehow allowed to micromanage USPS price changes.

The government also doesn't set Fedex or UPS's rates, or appoint their chief executives, or pass laws about their pension funding. So it's not a fair comparison.

Maybe it's time to start delivering mail twice a week instead of every day.

The thing is that for priority mail, the truck still has to drive every day. Might as well load it up. Problem I read from the article is that that prio-1 mail is not handled as prio-1, but rather after other, more lucrative, mail.

But to be fair, in my country we had a new mail service competing with the public mail service. The new mail service only provided twice a week, but at a reduced rate. If you didn't care about your package being delivered a week from now, then it was convenient. End result was that the public service no longer could compete with the lower prices and reduced volume, BUT in the meantime was allowed to merge(=take over/take down) with the new mail service, by grace of the government who gave them a get-out-of-antitrust-jail card. Currently the case is at the EU court, which decided the merger has to be reversed, but the damage is already done. Contracts ended, brand damaged.

If you privatise your mail service, don't be surprised if it becomes stupidly expensive to deliver the same quality of service. Competition won't exist because it will be acquired by the main company. And the government will simply pay for that quality of service, as that is what the voters expect.

Everyone I know checks daily, sometimes a couple times a day.

It was suggested many times over the years that the USPS reduce delivery to cut costs, and that didn't seem like a bad idea, but I'd suggest that any changes to the USPS need to come from an aligned perspective and in an orderly fashion, and that's not how the USPS is being treated these days.

Raise prices for shipments? Or make them "free" using covid-19 "free" money

More like if you let your legislature run wild and artificially cripple your own services.

USPS is a service that warrants a bailout, and repealing of these acts. They have been self profitable for a very long time, but cannot sustain their operation in this way.

One facet is reintroducing banking services.

This explains a lot about pensions. First, having to have the entire pension cash value up front makes pensions extraordinarily expensive: giving someone a $1k pay raise puts you over $20k out-of-pocket for that pension. Consequently, the private sector abandoned pensions because they were unaffordable. The other observation is that, because almost all public pension funds have assumed unrealistically high growth rates, so consequently their funding rates have consistently slipped.

The truth of the matter is that virtually all public-sector pensions are in exactly the same boat as USPS's pension is. It's just that the governments are more effective at sweeping their pension issues under the rug, while they have forced the USPS to have its pension issue sit in broad daylight.

We should be pushing to force the same reckoning on cities and states sooner rather than letting things deteriorate while thinking we'll magically make up lost ground in the next decade.

[1] Edit: As an addendum, the USPS is specific required to 100% fund its pension benefit. This 100% funding requirement is actually legally unique, although a decent portion of the private sector does seek to do so.

So a pay cut by another name? Because even if pensions aren't available, individuals still need money to retire on

It would be a pay cut if the modern salary plus employer match were less than the prior salary plus employer contribution to the pension fund. I do not know if this is the case (especially when you maximize the match). I also do not know to what degree companies were underfunding the pensions in the past. My suspicion is that the upper-middle-class who maximize employer match are no worse off, perhaps better off, but that the median employee is worse off.

There isn't an easy answer to balance the needs of existing liabilities (pension commitments) with financial operations - the problem with the USPS was (I believe) the catch-up funding required to meet funding requirements, and not the actual funding itself.

Pensions are funded by the next generation, just like Social Security and Welfare.

You pay for the previous generation in exchange for the next generation paying for you.

Without this kind of offset, you end up with as much as 10-15% of your population as indigent elderly, homeless and starving, who become MAJOR financial burdens on their children (and I mean MAJOR -- ask someone from China or a similar country about it) or who become homeless or die.

It's unfeasible to set aside the money all at once, and in fact hoovering that much money out of the economy and into investments would have a noticable effect on the economy. You're basically suggesting something outrageous like 5% of GDP stop being transfer payments to poor people who spend it immediately and start being investments into government treasuries and corporate bonds.

1. Governments don't put even the actuarially required amounts into pension funds that assume 7-9% rates of return on fund investments. 2. Governments have been slow to adjust their expectations on returns, since 7-9% is far less achievable than it was in the 80s and 90s when interest rates were much higher.

Permanent low interest rates, economic downturns, and underfunding pension funds together have created an untenable environment. The cash isn't there in many municipal and state pension funds, and earning that much in returns is laughably difficult or requires an inordinate amount of payments now.

Now, it's absolutely true that the USPS is being held to a ridiculous and overcorrected standard in this case. But it's not the case that our current pension obligations, in many of these local and state retirement funds, can be paid for through current employee cash receipts.

What we should actually be doing is pay as you go. You pay into the pension and you get out what you paid, plus growth. We could have switched to this model at any point over the last 70 years if American society wasn't so addicted to endlessly kicking shit down the road and punting on problems.

Social security is not an unfunded liability. If you look at your paycheck you will see a line that explicitly goes toward funding social security. It is currently underfunded due to (1) Congressional malfeasance; and (2) the $120K cap on paying into the fund.

Even the underfunding is nowhere near as bad as advertised - current funding is sufficient to pay full benefits through 2035 and about 80% of benefits from 2035-2094. If we pay back the borrowed money and remove the income cap the funding issue would resolve.

It is only underfunded due to these two reasons.

Well, which is it? If it were simple to make social security solvent at full promised benefits then surely we would?

And no, surely we wouldn't. The Republican Party wants to destroy Social Security, they aren't interested in anything that would make it stronger.

Today, many cities and states have underfunded pensions following a continually worsening trajectory. The scale is enormous. Please take a read about the state of public pensions in Illinois, for example.

But the claims of unfunded liabilities are far overstated. The worst of them assumes that you have to have the pension fully funded for a new employee on the day they start working which is ridiculous in any business.

https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p...

Regardless, the “pre-funding” period is over and the fund is running a deficit as retirees are currently paid from it, so it’s a moot point.

Compute the net present value of future payments does not sound like “accrued” benefits at all. It sounds like future payments which is the opposite of accrued benefits.

I don’t know the details of USPS’s finances, but reading that bill it seems they basically got rid of pensions around 2007

“ Postal Civil Service Retirement and Health Benefits Funding Amendments of 2006 - (Sec. 802) Relieves the Postal Service of an obligation to contribute matching amounts to its employees' civil service retirement.”

but required that all existing pensions be prefunded.

That’s an extremely onerous requirement and whether the fund has been funded or not, it will still affect service drastically. Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now.

This means you calculate the total amount of added expected additional pension payments earned over the last year of work.

So, if last year you could have retired with a pension estimated to pay out $100k, and this year your pension would be estimated to pay out $120k due to the additional year of service, then that number would be $20k.

Since that $20k is not paid out all at once, but over a period of time in the future, you calculate the net present value which reduces the amount based on a “discount” rate which is the expected rate of return on your cash. So, $20k paid out over 10 years starting 10 years from now is discounted to, e.g. $14k, which is how much money you need invested today to fully fund that liability in the future.

To sum it up, in that hypothetical example, the USPS is supposed to be banking that additional $14k to find the future liability.

It’s actually exactly what anyone running a pension program absolutely should be doing.

In fact, it is somewhat of a moot point - the USPS has been accruing, but not paying. Service is being funded.

The USPS actually stopped paying meaningfully to PSRHBF back in 2011. At this point, they're somewhat over $47bn behind in payments.

Please take a look at the USPS 10-K to get the fine detail here.

> Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now

The fund is not paid off as the Post Office never actually made the vast majority of its payments. It's also not in an account waiting to be used. It is being used right now to fund current retirees and it's running deficits. The reason it's a moot point is because even if this requirement were removed today it would operate in the same way i.e. pay as you go.

They also have huge retirement —prefunding obligations which is pretty much unprecedented in either private business or government agencies.

All of these public obligations are poorly thought out and largely out of the control of the USPS itself. People bitch about USPS being inefficiently run and that’s true to some extent, but the most fundamental issues they struggle with revolve around factors beyond the control of USPS management.

In other words, they are inefficient.

TL;DR: Deliberate government action to defund them has resulted in them having way less money than you would expect.

1 - Forced to save billions over a short period of time for retirements benefits. 2 - Inability to set their own prices, like a business would.

The extra business from Amazon should have been a massive boon to USPS. But it seems the ridiculously low rate they got into, plus the couple factors above (and I am sure many others - like being required to maintain rural routes at a loss) has put them in a bad situation.

The problem with the mail is the symptom, like a headache. But what is the cause, like a blunt to the head or migraine or a hangover?