Is It Really Profit if There’s Future Retirement Debt?
Fredric Rolando, president of the National Association of Letter Carriers, might just get to the heart of the pension/retirement issue when he explains the following, by way of arguing that the U.S. Post Office is a profitable enterprise:
Congress requires the postal service to put $5.5 billion of its earnings each year into a separate account to “pre-fund” future retirees’ health care insurance far into the future.
No other business or government agency has such a requirement. The postal service won’t actually spend the money it puts away for “pre-funding” until many years from now.
Yet it counts as a loss on its balance sheet today.
Whether it’s accurate to say that no other organization faces such a requirement (which is also different from saying that none utilize the methods anyway), I don’t know. The question that comes to mind is: why shouldn’t government agencies and businesses put aside money for benefits to be paid to current employees when they retire? Inasmuch as the payment is obligatory, the expense is being incurred in the present through the continued employment of the worker.