The United States Postal Service announced on Thursday, April 9 that all employer contributions to the Federal Employees Retirement System (FERS) will be suspended.
That suspension will take effect on April 10 as the agency faces a severe financial crisis that could leave it cash-strapped within 12 months.
Through cash-saving measures, about $2.5 billion will be saved. However, this would halt the $200 million in payments the USPS makes every two weeks to contribute to the federal pension program.
According to USPS Chief Financial Officer Luke Grossman, “the risk to the Postal Service and the American public from insufficient liquidity for postal operations dramatically outweighs any long-term risk to the pension funds.”
Concerns about the cash crunch were raised last month by Postmaster General David Steiner, who warned that without major reforms the agency would face a shortage of money by February 2027.
This potentially halted mail delivery nationwide. According to Steiner, this could be solved by increasing first-class stamp prices to 95 cents, or $1, from the current 78 cents.
Another proposal was to reduce delivery from six days a week to five or fewer.
Since 2007, the USPS has reported net losses of $118 billion as the volume of first-class mail has fallen to its lowest level since the late 1960s.
By 2025 alone, the agency had a loss of $9 billion.
Despite the suspension announcement, the USPS emphasized that the pension suspension will not immediately affect current or future retirees.
