Faced with insolvency, the U.S. Post Office said Wednesday it will suspend this years remaining $800 million contribution to its Federal Employees Retirement System (FERS).According to Bloomberg, the USPS is holding off on the payment while it waits for government approval to delay a $5.5 billion payment for worker health benefits.
While FERS covers 85 per cent of postal workers the Postal Service maintains they have overpaid the retirement account by $6.9 billion and has asked Congress to pass legislation returning that money.
In an email to Bloomberg Postal Service spokesman, David Partenheimer said,“We believe we have already satisfied our current funding obligations. The Postal Service believes there will be no impact on employees.”
The Justice Department’s Office of Legal Counsel will review the decision, but regardless the cuts will not be enough.
The service also wants to end Saturday delivery and reduce pre-payment of retiree health benefits, moving to a pay-as-you-go system.
The USPS reported an $8.5 billion loss in 2010 and a widening second quarter loss of $2.6 billion.
Chief Human Resources Officer Anthony Vegliante said contributions will continue to be made to the Thrift Savings Plan.
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