For quite some time there have been talks of the United State Postal Service filing for bankruptcy. As the longest running agency in U.S. history, the postal service was once one of most desired employers with their generous benefit and pension programs. However, as technology advances and the economy waivers, the USPS has struggled to maintain profitability over the last decade. After receiving a $11.6 billion bailout from the government to help avoid bankruptcy, big decisions are in the works for what is to come.
Delivering Bad News
This week the USPS admitted that they would not be able to satisfy their obligation to pay for retiree health care benefits. The $5.5 billion payment is legally required as per the union contracts held between former employees and the agency, but with little cash on hand the USPS is financially unable to make the payment. Now unable to support general expenses and the near $8 billion a year in employment obligations, the USPS is considering some significant cuts.
It is unclear at this point as to whether employees or agency retirees with suffer further reductions in benefits or pensions, but customers are likely to experience the heaviest of cuts to services. One idea is to do away with Saturday mail deliveries. Reducing the costs associated with deliveries and mail office services could save the USPS a significant amount of money each year, freeing up financials to be spent on contractual obligations. No decisions have been made and ideas for allowing the agency to expand into non-mail markets for profit boosting are still being considered.