USPS Suspends Employer Contributions to Federal Employees Retirement System

The United States Postal Service announced on April 10 that it will temporarily halt its employer payments to the Federal Employees Retirement System (FERS), the defined‑benefit component of federal workers’ pensions. The move is part of a broader cash‑conservation plan aimed at averting a liquidity shortfall that officials say could materialize within a year.

Scope of the Suspension

The agency will continue forwarding employee‑made contributions to FERS and will maintain regular deposits to the Thrift Savings Plan, a 401(k)‑style retirement account. Only the agency’s own bi‑weekly contribution—about $200 million every two weeks—is being paused, freeing roughly $2.5 billion for the current fiscal year.

Background and Financial Pressures

The Postal Service reported a $9 billion loss for 2025 and warned that its operating cash reserves are dwindling. A spokesperson described the situation as a “severe financial crisis” and emphasized that the suspension is a temporary measure intended to preserve liquidity.

Reaction and Outlook

Labor groups, including the National Association of Letter Carriers, called on Congress to grant the USPS additional borrowing authority and to reform its pension funding formulas. Officials expect to resume contributions once the agency stabilizes its cash flow, likely before the end of the fiscal year.