USPS pauses pension payments to avoid cash crisis
The U.S. Postal Service says it is taking steps to conserve cash amid what officials describe as an ongoing, severe financial crisis.
Beginning April 10, USPS is temporarily suspending its employer contributions to the defined-benefit portion of the Federal Employees Retirement System, according to the agency. Postal officials said the move will free about $2.5 billion in the current fiscal year.
Why USPS is suspending pension payments
USPS said the temporary suspension is meant to preserve liquidity as the agency faces mounting losses and the risk of running out of cash. Chief Financial Officer Luke Grossmann said the Postal Service will continue sending employee retirement contributions to the Office of Personnel Management, along with Thrift Savings Plan contributions, including employer automatic and matching funds.
Postal officials said the move will not have an immediate negative effect on current or future retirees. The Associated Press reported that USPS will also continue to make employer contributions to Social Security.
The decision follows warnings from Postmaster General David Steiner that the agency could run out of cash within 12 months without major changes, CBS News reported. Steiner has said those options could include reducing delivery from six days a week to five or fewer.
What price increases is USPS seeking
The Postal Service is also seeking more revenue through postage increases. The Associated Press reported USPS has asked regulators to raise the price of a First-Class Mail Forever stamp from 78 cents to 82 cents.
CBS News also reported the agency plans to add a temporary 8% surcharge to some postage prices beginning April 26 to offset higher transportation costs tied to the war with Iran.
USPS reported a $9 billion net loss in fiscal 2025.
Ella Rae Greene, Editor In Chief
