Postal Service Defaults On $5.6 Billion Payment Under Immense Burden Of Retiree Healthcare Pre-Funding

From Workers Independent News, 10.2.12, by Doug Cunningham

The U.S. Postal Service defaulted on a $5.6 billion payment for future retiree health benefits at the end of September. No disruptions to postal service are expected and this won’t affect current retiree health benefits either. This default increases the net operating loss of the Postal Service to $15 billion. Over $11 billion of that is due to the law requiring the postal service to pay billions every year to fund future retiree health benefits – a requirement no other federal agency has. Ken Lerch is president of the National Association of Letter Carriers Branch 3825 in Rockville Maryland.

[Ken Lerch]: ““They’re starving the postal service to death. All that needs to be done is for Congress to change the pre-funding law. The health benefits for retirees is already – they already have $48 billion set aside. It’s pre-funded for the retirees all the way through the year 2050. On Wall Street they would love to privatize the post office. And the want to privatize the post office not because the post office is doing poorly. It’s because the postal service brings in so much in revenue.”

Congress so far has failed to act to change the massive pre-funding requirement. Postal service management wants to end Saturday deliveries and close nearly half of its mail processing centers. And that could cost as many as 100,000 jobs. Postal worker unions say that’s not necessary and Congress should end the pre-funding requirement for retiree health care.

Read the full article.

Published October 3rd, 2012

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