Frederic Rolando, the head of a labor group for U.S. postal workers, says the retiree health benefits funding problems at the U.S. Postal Service may be more manageable than they look.
Rolando — the president of the National Asociation of Letter Carriers — is one of the witnesses who testified Tuesday at a House Oversight and Reform Committee on the financial condition of the Postal Service.
A federal law, the Postal Accountability and Enhancement Act of 2006 (PAEA), has made the Postal Service the only employer in the United States required, by federal law, to pre-fund its retiree health benefits, rather than simply waiting for the bills to come in and hoping it will have enough cash to pay the bills.
“The Postal Service has defaulted on more than $40 billion in payments owed to pre-fund retiree health care expenses,” according to a hearing notice prepared by the staff of the committee, which is now controlled by the Democrats.
(Related: New York City Owes About $100 Billion for Retiree Health Care)
Rolando argued that the Postal Service situation is not as dire as it looks, and that there are still ways for the Postal Service to provide the retiree health benefits it has promised.
Excluding the effects of the PAEA retiree health benefits funding obligations, the Postal Service has been doing much better in better recent years, according to a written version of Rolando’s testimony.
Minus the effects of the health benefits funding requirement, the Postal Service generated $700 million in earnings in 2018 on $71 billion in revenue, Rolando said.