If you have heard the words "75 years" and "Post Office" recently you may enjoy a brief digression about how to account for pension liabilities:
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As an actuarial matter, for each day an employee labors under a defined benefits pension, you incur some liability in the future. Tech people will recognize this as very similar to stock vesting: irrespective of accounting treatment or payment timing, one day is one day long.
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The dominant way of funding pensions is called "pay-as-you-go": you're required to have cash reserves on hand to meet expected obligations over some relatively short window. But these reserves are not not not not not not not not not not not not not not not the liability.
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The liability grows every day for every current and past employee with a pension, and periodically goes down a little when one passes out of pension coverage, either by quitting before vesting or by passing away.
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This mismatch in reserves and liabilities has caused the "Pension Tsunami", because almost everyone got a rosy report from their actuaries as to what the pension would cost, took the suggested reserve levels those actuaries thought might possibly cover, and *did not* save it.
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The Post Office has relatively unique pension treatment, because it is quasi-governmental and part of the spinoff was Congress deciding that the Post Office should not be able to transfer unfunded pension liability to taxpayers.
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So Congress passed a law saying "You don't get to pay-as-you-go. Instead, you need to model out costs for current and previous employees over a 50 year window from retirement date, and reserve adequately against those projected costs."
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Defenders of the Post Office, 10+ years ago, said that this was unfair, because it is relatively unique treatment. The policy was instituted specifically to avoid transferring $100B+ in pension liability to the taxpayer.
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"The Post Office would be profitable if only..." is, to be blunt, a lie. It is an accounting fiction. The Post Office was never profitable. It can never be profitable. The interesting argument to have is "OK, then who covers the shortfall here? We lied. We can lie no more."
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This is not a situation unique to the Post Office. It will apply to almost every public pension. It is hitting the Post Office first because the Post Office is constrained by statute to lie a little less blatantly than most public pensions.
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For more reading on pensions, which are going to be the largest financial crisis the world has ever seen, see http://pensiontsunami.com The site is 15 years old, and this was generally well understood the day they opened and for decades before that.
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End of conversation
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