USPS Halts Pension Contributions as Cash Crisis Looms

What the suspension means

On Thursday the United States Postal Service announced it will temporarily halt its employer contributions to the Federal Employees Retirement System (FERS), a move designed to free roughly $2.5 billion in liquidity for the current fiscal year. The decision follows a warning to Congress that the agency could run out of cash in less than twelve months without sweeping reforms.

Financial stakes

USPS typically sends about $200 million to the Office of Personnel Management every two weeks to fund retirees’ annuities. By pausing those payments, the service hopes to preserve cash for payroll, supplier invoices and essential mail delivery. Contributions to employees’ Thrift Savings Plans will continue.

Potential reforms

The agency also filed a notice seeking regulator approval for a modest increase in postage rates, proposing to raise the First‑Class “Forever” stamp from 78 cents to 82 cents—a 4‑cent hike intended to shore up revenue.

Postal officials stress that the suspension will not affect current or future retirees’ benefits, but they warn that without additional measures—such as further price adjustments or a restructuring of pension funding—the service faces a looming liquidity crunch.