Originally Posted by
lostarchitect
+1, and USPS is actually a pretty sound business. The whole "unprofitable" USPS situation was politically created by those who want to kill it off. It was mandated that the USPS had to fund pensions 75 years in advance--more than any private business and any other government agency. They are paying pensions for people who are not employees yet. It's nuts. It adds up to billions of dollars a year in losses.
I'm not sure how USPS pensions work, but I do know how the accounting for pensions works (or doesn't work as is often the case) in for profit and in government accounting. It was only fairly recently that Governments really had to report on pension liabilities at all...and after those rules were phased in, they were permitted a 30 year period to phase in the new accounting standards reflecting pension liabilities. Pension obligations are essentially forecast annually by actuarial guys who recommend a pension funding level for the company.
Those funding amounts are very tricky to calculate and you can smooth them out over periods of time due to market volatility. Often those funding levels aren't met (particularly in government funds) and the results are liabilities that should be carried on the balance sheet. That gets fuzzy in government accounting for the reasons mentioned earlier. No one has ever been willing to sign off on the financial statements of the federal government by the way.
Pensions across the board are often underfunded - but since they're also government insured, they have a sucker to bail them out.