The US Postal Service retiree benefit promises and reprehensible politics. Massive liabilities will cost you eventually.

The following appears on Facebook and elsewhere and is readily passed around and accepted as fact. It’s pure bunk.

The law required the funding of the massive liabilities for retiree health benefits, funding which has been missed in several years. Sooner or later all these liabilities will come due and the fund will be depleted and retiree promised benefits put in jeopardy. Other corporations generally do not fund retiree benefits because tax laws do not provide a viable way to do so. Instead they cut or eliminate these benefits … except government entities.

As usual, public employee unions have achieved an exceptional and unaffordable level of benefits. That’s the truth, and one major factor of why the USPS is in bad fiscal shape. To add insult to injury, USPS retirees do not have to enroll in Medicare, but can keep their federal benefits as primary coverage. You would never find that in the public sector – if you could even find retiree medical benefits. And that too is the truth.

US taxpayers are funding the incompetence related to the management of federal employees while public unions show complete disregard for the general public.

As of the end of FY 2016, assets in the Postal Service Retiree Health Benefits Fund were $51.9 billion, and the OPM calculated the retiree health benefits liability at $104.0 billion according to the USPS Inspector General.

The financial outlook of the Postal Service Retiree Health Benefits Fund (RHB Fund) is poor. At the end of fiscal year 2017, the fund’s assets declined to $49.8 billion and unfunded liabilities rose to $62.2 billion. Based on Office of Personnel Management (OPM) projections requested by GAO, the fund is on track to be depleted in fiscal year 2030 if the United States Postal Service (USPS) continues to make no payments into the fund. Annual payments of $1 billion or $2 billion into the fund would extend the projected depletion date by 2 to 5 years (see figure). USPS has said that its required payments to the fund are unaffordable relative to its current financial situation and outlook. For the past 11 years USPS has incurred large operating losses that it expects will continue. Additionally, USPS has stated that its opportunities for revenue generation and cost-cutting are limited. USPS reported that it did not make required fund payments in 2017 in order to preserve liquidity and cover operational costs. If the fund becomes depleted, USPS would be required by law to make the payments necessary to cover its share of health benefits premiums for current postal retirees. Current law does not address what would happen if the fund becomes depleted and USPS does not make payments to cover those premiums. Depletion of the fund could affect postal retirees as well as USPS, customers, and other stakeholders, including the federal government. About 500,000 postal retirees receive health benefits and OPM expects that number to remain about the same through 2035.

Source: General Accounting Office (GAO)

But a promise is a promise and fixing this mess should not be borne solely by postal retirees. Sadly, as usual, those responsible will never be accountable.


  1. I am a USAF retiree and even though I have medical coverage Tricare for Life, My wife and I have to enroll in Medicare at age 65 and the military insurance is then considered second payer. The law needs to be changed, that would help the Postal retiree medical fund balance sheet, I am sure. Time to write my reps in D.C. Disfunctional Congress!


  2. Why shouldn’t the postal retirees shoulder 100% of the burden? They have a union, right? So, whose fault is it that the postal service and union agreed to benefits that they were not willing to fund, expenses in excess of what patrons are willing to pay? Let them charge what is necessary to fund the cost as necessary … see what that does to their business model.

    Who should finance these extravagant retiree medical benefits? Are you assuming it should be American workers and retirees, few if any, will themselves qualify for a pension, let alone retiree medical coverage?

    Last thing we need is a federal taxpayer bailout for multiemployer pensions and the associated retiree medical coverage, state and federal worker pensions and retiree medical, let alone the quasi-government agencies like the postal service. Do one, and every last one of them will have their hand out. And, of course, all of that will be on top of the estimated $200+ Trillion in unfunded Social Security and Medicare liability.


    1. I think the average worker is a victim of their irresponsible union leaders just as average Americans are or will be the victims of irresponsible politicians despite the fact Americans keep electing them over and over.


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