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Benefits February 9, 2011
Post Office Says Pre-Funding Retiree Health Care is Reason for Loss
February 9, 2011 (PLANSPONSOR.com) – The U.S. Postal Service announced it had a loss of $329 million for the first quarter of the fiscal year — October 1, 2010 – December 31, 2010.
Reported by Rebecca Moore
According to the Associated Press, the agency says it continues to lose money at a rapid pace thanks to a requirement that it make advance payments to cover expected health care costs for future retirees. Without the requirement, the post office said it would have had a net profit of $226 million for the quarter.
The news report said Congress has proposed easing the upfront payments, which are not required of any other government agency.
“The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” Postmaster General Patrick R. Donahoe said in a statement, according to the AP.
The post office has sharply cut staff and reduced other expenses, and is considering closing smaller post offices to further trim costs.
The $329 million loss was up from a $297 million loss in the same period the year before, which ended with a total loss of $8.5 billion.