[michaeldhopkins]

Correct. I wasn't saying that they have to be unprofitable going forward, just that the pre-funding doesn't entirely explain the losses.

I think it's a sensible document and it shows the USPS understands their situation and is willing to remain solvent in a humane and useful way.

[pbreit]

But the pre-funding, which what I can determine, is rare both in public and private sector, brings them from profit to loss.

[michaeldhopkins]

The USPS pension obligations are around 100% funded (has been overfunded at 105% in the past; may still be the case.)

The average private company funds its pensions at about 80%. It's supposed to be a complete funding when interest rate of investments is factored and the average used to be about 90%. There are (questionable) accounting tricks that private companies can use to underfund pensions that are not available to the USPS because of the way their Congressional mandate is written, and because of the enormous amount of public scrutiny.

So, to bring the USPS in line with what is required of the pensions of private companies, they would reduce their obligations by 10-20% at most. They would still have the same problems.

Public pensions don't have funding requirements. This is a disaster for millions of workers since they won't get their pensions. It's not a good idea to rely on perpetually increasing government revenue without any kind of savings in reserve.

That said, eventually, the USPS will need to reduce pension payments in order to survive if their other initiatives fail, or they will have to obtain direct funding from Congress. If they are required to pre-fund to the end, then retirees will benefit at the expense of current employees. If they are allowed to drop pre-funding and move to the public pension model, then retirees will suffer for the benefit of current employees.

[pbreit]

But we're talking about health care, not pensions (similar but different).