R Street Institute

Policy Studies Regulatory Reform

Barriers to sound postal pension risk management

by Nick Zaiac
Sept 4, 2018
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Key Points

Postal pensions are in bad financial shape and workers risk cuts in the future.
Allowing postal pensions to be invested like pension money of other government workers would fix most of the under-funding problem.
With pensions fully funded, reforms to the postal service business model would be much easier.
Congress is considering many postal proposals, and changes to pensions is one of the options on the table.

Postal law that mandates extra-conservative use of postal savings puts letter carriers and postmasters at greater risk of retirement income being reduced in the indeterminate future. Changing this policy and applying pension investment rules typical of other government employers is thus a minimally-controversial postal reform option for federal legislators.

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