Sally Redux

Do the private postal services have to as well? (I don't know).

Michael

It is. Republicans want to make USPS insolvent so they passed a law to make USPS pay for pensions for the next 75 years so that postal delivery will become privatized.

Then they borrow that money to pay for general fund expenditures so they won't have to raise taxes.

Michael

In a sense, yes but their pensions are backed by the government Pension Benefit Guaranty Corporation (PBGC) so if they go bankrupt, the government foots the bill.

Although private pensions are supposed to be 100% funded, private pensions are currently underfunded by about $400 billion.

Pulaski

I doubt they were provide (UK speak) "company pensions" for many/ any of their employees. They likely do however provide a 401k scheme with some employer match, (3-4% match after 12 months employment would be typical) but that match element would be the end of their liability to provide post-employment income for retirees.

Pulaski

The credibility of your analysis is severely compromised by your unsupported political rhetoric.

Michael

There are still quite a few old companies that provide standard pensions such as AT&T.

Sally Redux

It certainly makes it harder for them to compete on a level playing field.

Also I believe they've been prevented from raising the cost of stamps to a realistic price.

Pulaski

But many have scrapped them for newly hired employees, or for all employees after a certain date. I work for an "old" company which closed its pension to new hires a year or so after I joined, and froze it completely two years later, so I will eventually get a pension, but only based on about three or four years service around 2003-2006.

Pulaski

If they wanted to do that they should scrap the USPS pension in favour of a 401k.
I wish they'd raise the bulk (junk) mail rate - which is still as little as 10¢ for delivery of "paper for recycling". ..... I suspect that the USPS could solve much of its problem by raising the bulk mail rate, .... however the Direct Mail Association (or whatever they call themselves) has a powerful lobby in DC.

Sally Redux

I thought that was the whole point though, they can't choose on the pensions.

That junk mail is disgusting and should be prosecuted for crimes against trees

Pulaski

On that we do agree!

Michael

That could be debatable since the republicans will never admit it.

But if you look at what they did with Medicare, that seems to be the poster child of what they want to do.

In 2003, they passed Medicare reform which reduced the solvency of Medicare by 15 years and started "Medicare Advantage" at 14% more cost than traditional Medicare for the same coverage. They also passed the prescription drug program with private companies selling plans where the government pays 75% of the cost of drugs and the bill contained a provision that the government couldn't negotiate reduced drug prices.

The republicans opposed the provisions in health care reform to reduce the 14% subsidy, the negotiation with drug companies to fill the donut hole, and the reduction in payments to doctors and hospitals to extend the life of Medicare for another 8 years. They also called end of life consoling "death panels" but that could save the Medicare a lot of money.

Everything seemed to be aimed at making Medicare insolvent and therefore privatizing Medicare with additional costs being passed on to the consumer. It seemed to be a bait and switch tactic where they give everyone what they want but then pull the rug out from under them when Medicare runs out of money.

Giantaxe

I doubt the Republicans would stand in the way of closing the USPS pension plan to future enrollees. Or of removing retirement health benefits. A more likely obstacle is USPS's union contract.

I do agree with Michael that there's a lot of politics wrapped up in this.

Can the USPS declare bankruptcy I wonder, and simply shovel its pension obligations to the PBGC?

Nutmegger

I read that Saturday delivery of packages will continue, as packages are the most profitable part of USPS's operation -- it is just letters that are becoming obsolete and won't be delivered on Saturdays.

jeffreyhy

I support the USPS by using the postage-paid envelope often provided to send junk mail back to whence it came.

Regards, JEff