Postal Service Set to Default on Billions in Health Fund Payments
The Postal Service, faced with continuing financial losses because of a drop in mail volume, expects to default for the first time on its annual payment for future retiree health benefits.
The $5.5 billion payment, which was deferred from the 2011 fiscal year, is due Aug. 1. The Postal Service is also scheduled to make a $5.6 billion payment for 2012 in September. A spokesman for the agency said that barring intervention from Congress, it would default on both payments.
“We are simply not capable of making either of these payments to the U.S. Treasury, in part or in full, while continuing to meet our other legal obligations, including our obligation to provide universal service to the American people,” said the spokesman, Dave Partenheimer.
Missing the health care payment will not cause immediate disaster, nor will it affect current retiree benefits. The Postal Service will still be able to pay its employees and buy fuel for its trucks to deliver mail on time, postal officials said.
To read more about this latest problem to beset the USPS and the reasons for it, please click here
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