[wildgift]

The first thing they need to do is reduce the pension funding requirement, which was forced by a 2006 law. They have to fully fund the pension for 75 years, and do that in 10 years. That would reduce their operating budget deficit.

Second, they need to push their parcel service, and open the counter all week long. The internet has caused a reduction in regular first class postal mail, but is also increasing the number of packages people send. Rising fuel costs make sending packages locally a good option.

I like Saturday home delivery, but from a business perspective, it's not critical. Parcels, however, I think are critical.

[yummyfajitas]

The first thing they need to do is reduce the pension funding requirement, which was forced by a 2006 law.

Yes, rather than fully funding their pensions like any private company, they should be allowed to push massive problems into the future like the public sector does.

[rdl]

Private companies don't really fully fund their pensions, but during the period where pensions were common in private companies, those companies were expanding in revenue and headcount, so it was ok. Was.

High-risk private enterprises don't do pensions now (can you imagine a Zynga Pension Plan?). Approximately everyone has shifted to defined-contribution from defined-benefit. The problem is USPS and the fully-private companies with legacy pension plans are both in long-term decline and have underfunded pensions, but USPS is particularly large in workforce and obvious in long-term decline (and political).

[yummyfajitas]

Private companies are legally obligated to fund defined-benefit pensions. There are some waivers given out, but it is generally required.

http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR00004:@@@L&#3...;

Though strangely, defined benefit non-pension plans (e.g., retiree health care) are not required to funded. That's a loophole which should definitely be closed.

You are correct that the private sector has abandoned pensions for defined-contribution retirement plans, and with good reason. The public sector should do the same.

[quinnchr]

"The PPA increases the funding target for single-employer defined benefit pension plans from 90 percent to 100 percent of the plan’s present value of all accrued benefit liabilities"

Cool, now just make them fund the next 75 years of expected liability, instead of just the current liability.

[Danieru]

They already do, that is what "present value of all accrued benefit liabilities" means.

[quinnchr]

Hmm yes those 1/3 of Fortune 1000 companies who do decide to prefund (which is entirely optional, unlike for the USPS) do so at average of 30% of liability. At the USPS pre-funding rate they're projected to have 73% of future liability funded by 2016.

I think you're on to something though, we should definitely require private sector retirement benefits to be pre-funded by 100%, then we can all point our fingers and say how obvious it is that the private sector is less efficient.

[rdl]

I don't really understand the pension funding issue -- I assume it was that the pensions were previously underfunded, and this was to correct it.

The issue is that even the GAO thinks there are "pyramid" issues -- the USPS revenue is going to be in a long-term decline, and peak-retirees will hit in a period where the revenue is lower than today. So, pre-funding makes a lot of sense.

Similarly, SS (and I think medicare?) were supposed to be pre-funded during high tax years of the baby boomers. There's technically a surplus, but it's invested in US treasury debt, essentially an accounting trick. (although I don't know what an SS surplus would otherwise be invested in -- you don't really want the government investing in private securities, either).

Parcel drop-off could be automated, extended hours, partnerships with businesses, etc., although I think most parcels originate from businesses now.

Maybe a good compromise would be fewer post offices, open later, and less delivery, but with mail available for pickup at the post office up to the day before delivery. This would be capital expensive vs. operating expense intensive, which should be good for the USPS (they can borrow at cheap rates, and the government could fund some of this).

[niggler]

The one sentence summary that explains the entire situation is: the 2006 pension funding requirement change was written and pushed by congresspeople who have taken campaign contributions by UPS and Fedex.

The reality is that most of the losses since 2006 were directly due to the overfunding requirement (they had to prepay 75 years of projected liabilities in 10 years time -- a requirement that no other agency has). They are also prohibited from cutting back service because they need congressional approval to do so (and a bunch of rural congresspeople are pushing back against it), so the USPS is in a real bind where they are being essentially forced to make changes but don't have the authority to do so.