“ Establishes in the Treasury the Postal Service Retiree Health Benefits Fund, to be administered by OPM. Requires the Postal Service, beginning in 2007, to compute the net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year”
Compute the net present value of future payments does not sound like “accrued” benefits at all. It sounds like future payments which is the opposite of accrued benefits.
I don’t know the details of USPS’s finances, but reading that bill it seems they basically got rid of pensions around 2007
“ Postal Civil Service Retirement and Health Benefits Funding Amendments of 2006 - (Sec. 802) Relieves the Postal Service of an obligation to contribute matching amounts to its employees' civil service retirement.”
but required that all existing pensions be prefunded.
That’s an extremely onerous requirement and whether the fund has been funded or not, it will still affect service drastically. Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now.
> ... net present value of the future payments required and attributable to the service of Postal Service employees during the most recently ended fiscal year
This means you calculate the total amount of added expected additional pension payments earned over the last year of work.
So, if last year you could have retired with a pension estimated to pay out $100k, and this year your pension would be estimated to pay out $120k due to the additional year of service, then that number would be $20k.
Since that $20k is not paid out all at once, but over a period of time in the future, you calculate the net present value which reduces the amount based on a “discount” rate which is the expected rate of return on your cash. So, $20k paid out over 10 years starting 10 years from now is discounted to, e.g. $14k, which is how much money you need invested today to fully fund that liability in the future.
To sum it up, in that hypothetical example, the USPS is supposed to be banking that additional $14k to find the future liability.
It’s actually exactly what anyone running a pension program absolutely should be doing.
The other commenters did will to address your misconceptions but I want to further elaborate on this one.
> Even if the fund has been paid off it’s not a moot point because that’s potentially billions of dollars that they cannot use to fund service and instead is waiting in an account somewhere to be used decades from now
The fund is not paid off as the Post Office never actually made the vast majority of its payments. It's also not in an account waiting to be used. It is being used right now to fund current retirees and it's running deficits. The reason it's a moot point is because even if this requirement were removed today it would operate in the same way i.e. pay as you go.
Regardless, the “pre-funding” period is over and the fund is running a deficit as retirees are currently paid from it, so it’s a moot point.