U.S. Postal Service to Stop Paying Into Pension Fund

[Dokkie]

The U.S. Postal Service, facing insolvency unless it gets approval to delay a $5.5 billion payment for worker health benefits, will suspend contributions to an employee retirement account to save $800 million this year.

The Postal Service will stop paying employer contributions to the defined-benefit Federal Employees Retirement System, which covers about 85 percent of career postal workers, it said today in an e-mailed statement. The $115 million payment, made every other week, will stop on June 24, the statement said.

http://www.bloomberg.com/news/2011-06-22/u-s-postal-service-will-suspend-contributions-into-employee-pension-fund.html

[rurallib]

1. The page you requested cannot be found.

link didn't work for me.

[walerosco]

3. The article can be found here

http://www.bloomberg.com/news/2011-06-22/u-s-postal-service-will-suspend-contributions-into-employee-pension-fund.html

Enjoy

[Dokkie]

4. Fixed

[nineteen50]

2. We have to pay

for those banker bonuses some how!

[Skink]

5. we should give medicare to all postal employees.

get the ball rolling.

[guruoo]

6. 'agency estimates it has overpaid by $6.9 billion and has asked Congress

to pass legislation to return that money.'
-From the story.

[Wilms]

7. The postal workers should go on strike.

Enough already.

[customerserviceguy]

8. There's some shaky math there

At some point, the USPS will be a fraction of what it is today, and there will not be enough workers contributing to the pension system so it can operate off of employee and employer contributions. This is just robbery from the people who worked so hard from before there was an Internet.

[hay rick]

11. Fully funded pensions.

Unlike all the states that are currently in the news, up to this point the Postal Service has always fully funded their pensions. Meanwhile, they are continuing to fully fund pensions for civil service employees (about 15% of all employees). The affected employees- those covered by FERS- receive a smaller pension than their civil service predecessors. In exchange for a substantially smaller defined benefit pension they contribute to and are eligible for Social Security. Also, USPS matches their contribution to the Thrift Savings Plan up to 5% of salary.

The real financial burden on the Postal Service is the requirement to pre-fund future retiree health benefits. One sentence buried in the middle of the story: "The service wants the authority to reduce pre-payment of health benefits for retirees and has said it will not be able to make a $5.5 billion payment due Sept. 30 for health benefits for future retirees." In short, USPS pays the employer share for health benefits and, at the same time, pays IN ADVANCE for the estimated employer contribution for post-retirement health benefits.

No other large government or private organization operates under that kind of burden. The Republicans claim that the Postal Service can't operate efficiently while working diligently behind the scenes to sabotage it.

Another piece of the ongoing congressional neglect/abuse of the Postal Service also gets a one sentence mention in the article: "Postal Service Inspector General David Williams said in January 2010 that the agency had been overcharged for its pension obligations. The Postal Service had overpaid by $75 billion, and if that was returned, it would create a surplus that could be transferred to a health-benefits fund, he found." The Republicans have no plan to allow the return of that money and prefer to pretend that it doesn't exist.

[customerserviceguy]

12. With so very many poorly funded pensions out there

I say that the burden of proof lies heavily on anyone who says that any public pension plan is fully funded. I see a rapid decline in the number of new postal workers over the next half century, and if the USPS makes it fully past the baby boom retirements, then it can start to trim pension contributions.

While I support the full funding of pension plans, I certainly don't favor the underfunding of retiree health plans, and I'm damn dubious of swapping funds from one plan to another. Fund the postal service by doubling or tripling the cost of junk mail!

[blkmusclmachine]

9. You know

there's the Too Big To Fail's. And everybody else? Well, we're the Too Small To Matter's.

[GeorgeGist]

10. drip, drip, drip

sung to tune of Obama's fancy fiddling.

[Fearless]

13. Fleecing the workers again and again... n/t