WASHINGTON (AP) — The financially troubled Postal Service is suspending its
employer contribution to the Federal Employee Retirement System.
The agency said Wednesday it is acting to conserve cash as it continues to
lose money. It was $8 billion in the red last year because of the combined
effects of the recession and the switch of much mail business to the
Internet. It faces the possibility of running short of money by the end of
this fiscal year in September.
“This move underscores the need for Congress to make bold, quick and
substantive reforms to the Postal Service. The USPS is hanging by a thread,
along with 8 million private sector jobs that depend on the mail,” said Art
Sackler, coordinator for the Coalition for a 21st Century Postal Service, a
group representing the private sector mailing industry.
The post office said it has informed the Office of Personnel Management that
the $115 million FERS payment made every two weeks will be suspended
effective Friday. The action is expected to free about $800 million in the
current fiscal year. The post office’s FERS account currently has a surplus
of $6.9 billion, the agency said.
“We will continue to transmit to OPM employees’ contributions to FERS and
also will continue to transmit employer automatic and matching contributions
and employee contributions to the Thrift Savings Plan,” said Anthony
Vegliante, chief human resources officer for the post office.
Over the last four years the Postal Service has cut its staff by 110,000 and
reduced costs by $12 billion. The agency has also proposed eliminating
delivery on Saturdays to save money and is working on closing small post
offices and consolidating sorting and other operations.
The post office, unlike other federal agencies, is also required to make an
annual payment of more than $5 billion as an advance contribution to future
retiree medical costs.