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Thursday, June 23, 2011

Post Office to Stop Payments to Retirement Fund - NYTimes.com

Post Office to Stop Payments to Retirement Fund - NYTimes.com: "To stave off insolvency, the Postal Service will discontinue legally required payments to its employees’ retirement fund on Friday, the agency announced Wednesday.

The announcement said that the post office hoped to save $800 million this fiscal year by stopping its payments to the Federal Employees Retirement System, which are $115 million every two weeks. Employee contributions from salary deductions will continue to be forwarded to the retirement fund.

The move will not affect pension payments for current retirees, according to a statement Wednesday from the Office of Personnel Management, which administers government retirement plans.

Federal terms have caused the service to overpay the fund, resulting in a $6.9 billion surplus, officials said. By suspending the payments, the money could be used to pay other bills."

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