Washington, D.C.—The U.S. Postal Service, seeking to avoid insolvency by the end of its fiscal year Sept. 30, will ask Congress to allow it to reduce its workforce by 20% and exit federal health and retirement plans to set up its own plans. In “Workforce Optimization,” the Postal Service explains a plan to break labor contracts and lay off 120,000 workers, saying “exceptional circumstances require exceptional remedies.” Another position paper on the Post Service's health benefits and retirement programs lays out the rationale for setting up its own plans, which it believes will be more cost-effective. This week, the Postal Service reported a loss of $3.1 billion for its third fiscal quarter. Last month, it announced plans to close more than 3,600 local post offices.