By Arlenys Tabare
In the midst of what is heading to be a “liquidity disaster,” The United States Postal Service (USPS) is evaluating alternatives to maintain itself in the coming months and not run out of funds, which is why it recently announced a suspension of contributions to the Federal Employees Retirement System (FERS).
Weeks before this announcement, the overall director, David Steiner, had warned about the risks the agency was running when facing a strong financial crisis. In this sense, he commented that to solve it there are only three things a company can do: sell more products, increase prices or reduce costs, said the CEO.
Therefore, in a recent statement, Steiner mentioned that “the action we are taking now to suspend payments from the FERS program helps us conserve cash for our operations and other necessary payments.”
For his part, Luke Grossmann, chief financial officer of the Postal Service, assured that “there will be no immediate detrimental impact on our current or future retirees if regular FERS program payments are temporarily withheld,” he said.
Agency reports indicate that more than $400 million dollars are directed monthly to figure out pensions for its employees, so, according to USPS, Suspending payments to FERS will free up nearly $2.5 billion during this fiscal year.
Another of the changes that the agency has been implementing is the increase in the prices of first-class stamps and postal rates, the latter due to the increase in the cost of fuel.
The surcharge to Postal rates will be 8% for Priority Mail Explicit, Priority Mail, USPS Ground Advantage and Parcel Pick out services. before the increase of up to $4 a gallon of gasoline.
While the prices of first-class stamps would go from 78 cents to 95 cents, representing an increase of 22%. “This temporary price adjustment will provide needed flexibility to the Postal Service by helping to ensure that the actual costs of doing business are covered, as required by Congress,” USPS said.
Keep reading:
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- USPS warns of rising prices for first-class stamps
