USPS to Cease Payments into Employee Pension
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The U.S. Postal Service (USPS) Wednesday said it plans to end contributions into its employee pension fund.
In an effort to conserve cash, USPS is aiming to delay a $5.5 billion payment for worker health benefits. The move is expected to conserve about $800 million this year.
The USPS will stop paying into the defined-benefit Federal Employees Retirement System, which covers about 85 percent of career postal workers.
Suspension of the payments comes as the USPS said it has overpaid the retirement account by about $6.7 billion. The Service is looking for Congress to return that money. The USPS is also looking for Congress to enact laws which would help the agency to cut costs and restore financial stability.
The service has been bleeding money for a while now, with the further integration of paperless billing and emails as consumers become more confident in the security of Internet banking and payment processing. In 2010, the USPS reported a loss of $8.5 billion, which carried over into its second-quarter report, when a wider loss of $2.6 billion was recorded.
In an effort to conserve cash, USPS is aiming to delay a $5.5 billion payment for worker health benefits. The move is expected to conserve about $800 million this year.
The USPS will stop paying into the defined-benefit Federal Employees Retirement System, which covers about 85 percent of career postal workers.
Suspension of the payments comes as the USPS said it has overpaid the retirement account by about $6.7 billion. The Service is looking for Congress to return that money. The USPS is also looking for Congress to enact laws which would help the agency to cut costs and restore financial stability.
The service has been bleeding money for a while now, with the further integration of paperless billing and emails as consumers become more confident in the security of Internet banking and payment processing. In 2010, the USPS reported a loss of $8.5 billion, which carried over into its second-quarter report, when a wider loss of $2.6 billion was recorded.
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