Notice the word pre-payment?
The Post Office …unlike other businesses it is required to Pre-Pay around $5.5 Billion in funds to cover its employee’s every year….
The Post Office wants to start its own Health Insurance plan which would save the agency Billions…
Andy change would require legislation from Congress which has not touched the subject …..
The problem is the main reason the Postal Budget has so much red ink…..
The U.S. Postal Service on Monday defaulted yet again on a prepayment for the healthcare of its future retirees as its finances remain in the red and legislative reform remains elusive.
The agency has blamed the payments, more than $5 billion a year as mandated by Congress to prefund the Postal Service’s future retirees’ healthcare, for contributing to annual losses of billions of dollars.
The requirement was set in 2006 when the agency was still thriving and before the economic crisis. But those massive payments, along with tumbling mail volumes, have since pushed the agency’s finances to a precarious position.
Last year, the mandate accounted for a large portion of the Postal Service’s $16 billion net loss.
“Without passage of comprehensive legislation as outlined in our five-year business plan, current projections indicate that we will have a dangerously low level of liquidity in the foreseeable future. Therefore, we will be unable to make the required $5.6 billion retiree health benefits prefunding payment due today,” a spokeswoman for the agency said in an email.
Postmaster General Patrick Donahoe has begged Congress for legislative reforms, including elimination of the annual prefunding payments and allowing the agency to run its own healthcare system.
Without that flexibility to run its own affairs, innovate and raise revenue, Donahoe has said, the agency could require a taxpayer bailout of nearly $50 billion by 2017.
The Postal Service had been expected to default on the retiree health payment, which it has skipped twice before. The agency has said it is currently losing $25 million every day and has exhausted its borrowing limit…..