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Dayton Business Journal...
U.S. Postal Service
to suspend pension fund contributions
by DBJ Staff
Wednesday, June 22, 2011
In a move to preserve its desperately needed cash, the U.S. Postal
Serviceplans to suspend its contributions for the defined benefit
portion of the Federal Employees Retirement System beginning Friday.
The Postal Service said Wednesday that suspending the bi-weekly
payments of about $115 million to FERS would conserve about $800
million in the current fiscal year. The Postal Service estimates it has
a FERS account surplus valued at $6.9 billion.
Employees’ contributions to FERS will continue to be made every two
weeks, as will employer and employee contributions to the Thrift
Savings Plan. Most of the Postal Service’s nearly 600,000 employees
reportedly participate in the FERS plan, while about 15 percent take
part in the Thrift Savings Plan.
Postmaster General Patrick Donahoe last month told a Senate
subcommittee that the Postal Service would be unable to make a
statutorily mandated $5.5 billion prepayment for future retiree health
benefits that is due at the end of September. The Postal Service has
been urging Congress to relieve it from the prepayment responsibility,
to give it access to its FERS surplus and to allow it to end Saturday
delivery of mail.
The Postal Service is trying to find ways to cut costs and remain
financially competitive given increased pressure from use of e-mail, as
well as delivery services such as those offered by FedEx Corp. and
United Parcel Service .
In March, the post office announced it was eliminating 7,500 jobs and
closing seven district offices, including one in Ohio.
Read it at Dayton Business Journal
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