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The United States Postal Service is suspending employer pension contributions for workers beginning Friday, citing a looming cash shortfall, the agency announced Thursday.<\/p>\n
The move, which affects the Federal Employees Retirement System (FERS), comes just weeks after the Postal Service warned Congress it could run out of cash in under a year without significant reforms, including changes to pension funding and stamp prices.<\/p>\n
USPS emphasized that the pause will have no immediate impact on current or future retirees<\/a>.<\/p>\n “There will not be any immediate detrimental impact to our current or future retirees if normal FERS cost payments are temporarily withheld,” Postal Service Chief Financial Officer Luke Grossmann said.\u00a0<\/p>\n POSTAL SERVICE SAYS CASH COULD RUN OUT IN UNDER A YEAR WITHOUT CHANGES<\/u><\/strong><\/a><\/p>\n A United States Postal Service worker delivers packages on Cyber Monday in New York Dec. 1, 2025.\u00a0<\/span> (Bess Adler\/Bloomberg via Getty Images \/ Getty Images)<\/span><\/p>\n<\/div>\n<\/div>\n USPS has previously reported mounting losses over the years, totaling $118 billion since 2007, as volumes of its most profitable product, first-class mail, fell to their lowest levels since the late 1960s.<\/p>\n The financial strain was further exacerbated by global tariffs, high inflation and recent spikes in gasoline prices, along with growing competition from private carriers such as Amazon<\/a>, which now delivers many of its own packages.<\/p>\n USPS said it typically sends the Office of Personnel Management (OPM), which oversees federal retirement accounts, about $200 million every two weeks to cover pension costs.<\/p>\n By suspending the payments, the agency expects to free up roughly $2.5 billion in the current fiscal year.\u00a0<\/p>\n While the agency has suspended its employer contributions, it said it will continue transferring employee payroll deductions into retirement accounts.<\/p>\n USPS COULD SLOW SERVICE IN CERTAIN AREAS AS IT SEEKS TO CUT COSTS<\/u><\/strong><\/a><\/p>\n An Amazon Inc. package sits on a conveyor belt at the United States Postal Service Merrifield processing and distribution center in Merrifield, Va., Dec. 19, 2018.\u00a0<\/span> (Andrew Harrer\/Bloomberg via Getty Images \/ Getty Images)<\/span><\/p>\n<\/div>\n<\/div>\n Separately, the agency said its Thrift Savings Plan (TSP), a separate retirement savings program similar to a government 401(k), remains unaffected.<\/p>\n USPS will continue processing employee-funded contributions and matching funds into the Thrift Savings Plan (TSP), and noted that workers will be able to contribute more in 2026 under new IRS limits.<\/p>\n Postmaster General David Steiner testified before Congress on the current state of the U.S. Postal Service. (Pool)<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n In March, Postmaster General David Steiner told a House Oversight subcommittee that the Postal Service could run out of cash within a year without major changes.<\/p>\n Steiner outlined potential cost-cutting steps, including reducing six-day delivery, raising first-class mail prices from 78 cents to $1 or more and expanding borrowing authority after USPS hit its $15 billion debt cap<\/a>.<\/p>\n![\"usps](\"https:\/\/a57.foxnews.com\/static.foxbusiness.com\/foxbusiness.com\/content\/uploads\/2025\/12\/931\/523\/packages-2.jpg?ve=1&tl=1\")
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