The United States Postal Service (USPS) announced on Thursday that it will temporarily halt its employer contributions to a federal pension program in a bid to conserve cash during a deepening financial crisis. The agency informed the Office of Personnel Management (OPM) that it will stop making biweekly payments of approximately $200 million toward the defined benefit portion of the Federal Employees Retirement System starting Friday. USPS warned that without urgent reforms, it could run out of cash as early as February.
The move is expected to save the postal service about $2.5 billion through September 30. USPS emphasized that the temporary suspension would not have any immediate adverse impact on current or future retirees. However, the agency continues to face long-term financial strain, having reported cumulative net losses of $118 billion since 2007. Declining first-class mail volumes—now at their lowest levels since the late 1960s—have significantly affected its revenue, with a reported quarterly loss of $1.25 billion in February.
To mitigate rising operational costs, USPS recently secured approval from the Postal Regulatory Commission for a temporary 8% increase in prices for priority mail and package deliveries, effective April 26 through January 17. Additionally, U.S. Postmaster General David Steiner has suggested increasing first-class stamp prices from the current 78 cents to as much as $1. Despite a 46% rise in stamp prices since 2019, Steiner noted that U.S. postage rates remain comparatively lower than those in many other countries.
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