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tazzygirl -> Postal Service suspends payments into worker pensions. (6/22/2011 2:37:12 PM)
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June 22 (Bloomberg) -- The U.S. Postal Service, facing insolvency without 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.
Suspending payments to the retirement account will help “conserve cash and preserve liquidity,” the statement said. The agency estimates it has overpaid by $6.9 billion and has asked Congress to pass legislation to return that money.
Congress must “make bold, quick and substantive reforms,” said Art Sackler, executive director of the Washington-based Coalition for a 21st Century Postal Service, which represents corporate mail customers. “The USPS is hanging by a thread.”
The agency and U.S. Office of Personnel Management will ask the Justice Department’s Office of Legal Counsel to analyze the decision, said David Partenheimer, a Postal Service spokesman.
“Regardless of the outcome of the Office of Legal Counsel review, the Postal Service believes there will be no impact on employees,” Partenheimer said in an e-mail.
Union Plans ‘Every Step’
Congress “must act now” to correct pension inequities, and the American Postal Service Workers Union “will take every step necessary” to protect retirement benefits, President Cliff Guffey said in a statement. The postal union, the world’s largest, said it represents 220,000 workers and retirees.
The Postal Service has 563,402 career employees and 469,401 retirees, Partenheimer said.
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 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. It also wants to end Saturday delivery.
http://www.businessweek.com/news/2011-06-22/u-s-postal-service-to-stop-paying-into-worker-pension-fund.html
Who is running this?
How do you overpay by billions?
And why the differing amounts? 75 Billion is alot more than 6.9 Billion.
If the claims of over payment are true, then what? Can Congress just come up with 75 Billion dollars to repay?
How in the hell do you over pay by 75 billion dollars?
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