The two weeks before Christmas are the United States Postal Service’s busiest days of the year. This year, an increase in e-sales, pandemic package deliveries, and staffing shortages will likely make the crunch even more noticeable for customers awaiting mail. At a time when more people are relying on the Postal Service’s survival and success, it makes sense to pay attention to its precarious position — and what can save it.

The fact is, the Postal Service is in financial trouble. With more than 600,000 employees, it posted a $9.2 billion loss in 2020, following 11 fiscal years of losses. Yet, Democrats and Republicans alike agree the Postal Service is incredibly valuable and worth protecting. Everyone sending and receiving holiday mail is invested in the value of the service, whether they think about it or not. There is, however, disagreement on the best way to protect it.

A popular “solution” to the financial problems is for the Postal Service to stop pre-funding health-care retirement benefits for current employees while continuing to fund retirees’ health benefits. As a finance professor who studies the Postal Service, I believe that’s a bad idea. Instead, the Postal Service needs to restructure its retirement plans to be more in line with what is most common in the private sector.

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Many public (government) entities today use “defined contribution plans,” as do most private companies in the U.S. In this system, individuals (and many employers) contribute money to a fund — 401(k) or 403(b), for example — on a monthly basis as they get their paycheck. This money is invested, usually in the stock market, and grows. At retirement, people can access the total value of their investment and have access to Medicare health benefits.

The Postal Service currently uses a “defined benefit plan.” In this type of plan, an employer guarantees fixed retirement benefits to employees. In many such plans, the employer and employee also make contributions to fund health-care benefits for retirement. These health-care benefits are often better than Medicare benefits, and therefore are expensive.

United Parcel Service (UPS), the U.S. Postal Service’s top competitor, recently stopped offering a defined benefit plan because it was “impacting the company’s ability to plan for future costs.”

Defined benefit plans are inherently risky. As an example, they partly caused the recent bankruptcy in Detroit. We don’t know what will happen to the Postal Service in the future. In great part due to the internet, the Postal Service now delivers 40% less first-class mail than it did at the turn of the century. This trend is not likely to improve.

Another proposed solution to making the Postal Service more sustainable, and better able to compete with a private company like UPS, is for the Postal Service to switch from pre-funding the health-care benefits of current employees to a “pay-as-you-go” system where current workers pay for the health-care benefits of current retirees. (The most well-known pay-as-you-go system is Social Security, where individuals’ “contributions,” in the form of Social Security taxes, go toward the retirement income of those now retired.) In the eyes of supporters of this plan, the Postal Service would save billions of dollars.

Switching to a pay-as-you-go plan means the Postal Service would have more money now, which sounds very attractive. But it also means that the health-care retirement benefits of future retirees (people working today) will be in danger. Down the line, when current postal workers retire, there may not be enough money to fund their health-care retirement benefits. At that point, it’s likely the Postal Service will simply say that it doesn’t have money to pay for the health-care retirement benefits. If that does happen, those responsible for the decision will be long gone and will have collected their salaries.

I propose being honest with employees. The Postal Service needs to switch from a defined benefit plan to a defined contribution plan to be in alignment with other public and private entities. Next, for new employees, it needs to stop offering separate health-care benefits for retirement. This removes the obligation to fund medical benefits for retirees. Doing so will save a lot of money and make the Postal Service more sustainable and competitive for the future. And, at this time of year, we can focus more on enjoying all those catalogs, greeting cards, and packages and less on worrying if, or how, they will get there.

Jesus Salas is an associate professor of finance at Lehigh University’s College of Business in Bethlehem. He is the founder and director of the Latin American Finance Association. The views expressed in this article are those of the author and do not necessarily reflect the official position of Lehigh University.