The Post Office Pension Ponzi Scheme

“Retirement costs are also the main reason the Government Accountability Office declared, in a May 2020 report relying on data gathered before the pandemic hit, that the Postal Service’s current business model was “not financially sustainable.””

“All private pension systems must prefund future benefits. Indeed, this is a wise thing for businesses to do if they wish to remain solvent. The unique situation for the USPS is that those requirements also apply to its retiree health care benefit plan. Private sector companies aren’t required to do that because they could, theoretically, eliminate those benefits at any time. The USPS, however, would not be able to do that without an act of Congress—and so prefunding is not only financially sound, but politically prudent.

Despite those obvious long-term drawbacks, the American Postal Workers Union and at least 270 members of Congress support a plan to switch the USPS to a so-called “pay-as-you-go” pension system. If passed, the USPS Fairness Act would allow the USPS to use current workers’ contributions to pay benefits to current retirees, rather than requiring that those dollars go into an investment fund to cover the cost of the current workers’ eventual retirement.”

“instead of addressing structural issues in the current retirement system”…
“it will certainly create bigger problems later on.”

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