USPS Defaults on Retiree Health Benefits…Again
WASHINGTON, DC—The United States Postal Service (USPS) once again has defaulted on its $5.6 billion prepayment for future retiree health care benefits as it teeters on the brink of not having enough cash to conduct daily business, Reuters reported.
"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," the USPS wrote in an e-mail.
The prepayment mandate accounted for a lion's share of the agency's $16 billion net loss last year. Postmaster General Patrick Donahoe has asked Congress for legislative reforms and the ability of the USPS to run its own health care system. Absent the ability to conduct its own affairs, Donahoe estimates the USPS could need a taxpayer bailout of as much as $50 billion by 2017.
It is the third consecutive retiree health benefits payment missed by USPS, which is losing $25 million per day and has maxed out its borrowing limit.