GAO calls on Postal Service to prefund retiree benefits
U.S. Postal Service officials and postal unions have long pushed Congress to relieve the agency of its obligation to prefund retiree health benefits. It’s a burden other agencies don’t share and one that officials say the Postal Service can’t afford. Defaults on prefunding payments total $11.1 billion.
But not everyone agrees that removing or substantially reducing the prefunding requirement is the best way out of the USPS hole.
A recent Government Accountability Office report says the “USPS should prefund its retiree health benefit liabilities to the maximum extent that its finances permit.”
The GAO said that deferring the prefunding payments “could increase costs for future ratepayers and increase the possibility that USPS may not be able to pay for some or all of its liability.”
The GAO says that "USPS should prefund its retiree health benefit liabilities to the maximum extent that its finances permit." The USPS is currently losing money on operations (excluding the health care pre-funding payment) and has reached its statutory borrowing limit (thanks to previous pre-funding payments). Their finances currently permit $0 for pre-funding.
The GAO knows this, so what is their point? Why not say that USPS should have pre-funded health benefits for current employees and retirees 75 years ago? Both statements are equally true and equally irrelevant.