In a
prepared statement, USPS said it will “continue to deliver the mail, pay our
employees and suppliers and meet our other financial
obligations.”
The
$5.5 billion payment due August 1 and the $5.6 billion payment due September 30 are
required by the Postal Accountability and Enhancement Act, which became law in
2006.
The
statement also said the Postal Service is moving ahead with implementation of
its strategic plan, adding “comprehensive postal legislation is needed in order
to return the Postal Service to long-term financial stability.” USPS says it
“remains hopeful” a new law will be enacted during the current
Congress.
Background
Under the Postal
Accountability and Enhancement Act of 2006, the Postal Service is required to
prefund Retiree Health Benefits. The Act established an accelerated prefunding
schedule for FYs 2007 through 2016. The Postal Service has made $17.9 billion of
these payments so far, reflecting the required payments for FYs 2007-2010. A law
was passed last year that deferred the FY 2011 $5.6 billion prepayment until
Aug. 1, 2012. As a result, the total required to prefund Retiree Health Benefits
in 2012 is $11.1 billion: the FY 2011 payment of $5.5 billion due by Aug. 1,
2012, and the FY 2012 payment of $5.6 billion due by Sept. 30, 2012. Absent
legislative action, the Postal Service will not make either payment in order to
fully fund its operations.
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