USPS shouldn't be forced to pre-fund retiree benefits

Friday, June 25, 2010

The June 19 editorial "Good news in the mail" made the misguided argument that Congress should continue to require the U.S. Postal Service to pre-fund its retiree health benefits on an accelerated, arbitrary timetable -- a requirement imposed on no other government agency or private-sector company. The mandate imposes a heavy burden on the Postal Service: In 2008, before the agency received a one-year reprieve from Congress, retiree health benefits consumed roughly 10 percent of the Postal Service's revenue, a staggering amount.

The editorial blithely argued that the fact that the Postal Service "cannot afford such payments only reinforces the wisdom of the requirement." One should draw the opposite conclusion: This requirement is excessive and unreasonable, particularly during a severe economic downturn. The Postal Service's retiree health obligations are already 41 percent pre-funded, enough to cover all benefits through 2025; meanwhile, most companies do not pre-fund retiree health benefits at all. And the Postal Service continues to cover all of its retiree health obligations on a pay-as-you-go basis.

Why should the Postal Service be held to a different standard than are other employers when it meets its current retiree health obligations every year?

Tom Kiley, Washington

The writer is a senior adviser at the Economic Policy Institute.

© 2010 The Washington Post Company