Locator: 50491USPS.
USPS has quit forwarding cash to the company's pension system -- the pension that pays its retirees -- to save money in order to keep operations going.
One immediate problem: all that cash that should have been going into the pension system will not be invested -- not even in 2% bonds/Treasuries/whatever -- and will instead be used to pay ongoing operational costs. In other words, the pension system that is projected to "be depleted by 2031" will run out of cash even sooner. Looking at the numbers, the USPS seems to be in worse trouble than PEMX. Even a third-year college football player can understand that problem. Not so sure about a third-year college basketball player, but I digress.
The TSP is not affected and, in fact, is doing very, very well. See below.
This is going to be the next headline story after the TSP problem is solved.
Current employees continue to pay into their pension fund. That money is generally "bundled" and then sent to the administrator in Washington who oversees the pension fund that pays retirees. There is enough money in the pension plan for now. Assuming contributions are not used for current operations.
But the writing is on the wall. There are plenty of options:
- cut services;
- discontinue customer-facing activities on Saturdays and Wednesdays;
- maintain all mail movement 24/7;
- cut benefits for new retirees;
- gradually move 50% of pension benefits to TSP
- US government bailout;
- significantly increase the price of the postage stamps;
- place a windfall profit tax on UPS and Amazon and move that money directly to the USPS;
- manage junk mail a whole lot better;
- my hunch: the Newsom solution: raise the USPS' borrowing cap from $15 billion to $100 billion, less than the projected cost of the California bullet train.
My hunch: Congress will fully fund USPS and they will get that done before they solve DHS/TSA problems.
By the way, TSP:
