Prefunding is synonymous with saving and investing for retirement. It is a responsible, time-tested, and essential practice to ensure today’s more than 600,000 postal employees and nearly 500,000 postal retirees receive low-cost, quality health care for years or even decades after they retire. As with quality pension plans for state government workers, money is put into a dedicated fund where the assets grow in value.
In the early 2000s, USPS, the Postal Regulatory Commission (PRC), and the U.S. Government Accountability Office (GAO) all recognized the need to protect the Postal Service’s retiree health benefits. The best way to do this, while also lowering costs, was to set aside money and invest it, or prefund. And Congress overwhelmingly agreed.