The United States Postal Service (USPS) will temporarily halt payments to its employees' pension fund from Friday, a move it says is necessary to conserve cash. The agency warned it faces a "pending liquidity crisis" and could run out of operating funds as soon as February 2027.
In a document of frequently asked questions, USPS stated the suspension of payments to the Federal Employees Retirement System (FERS) is due to the severe financial threat. "The risk to the Postal Service and the American public from insufficient liquidity for postal operations dramatically outweighs any longer-term risk to the pension funds from not making the currently due payments," said USPS Chief Financial Officer Luke Grossmann.
Financial Pressures Mount
This decision is the latest indicator of the postal service's deepening financial troubles. USPS reported a loss of $9 billion in the last fiscal year. Postmaster General David Steiner told a congressional hearing last month that the agency is at a "critical juncture" and warned that without intervention, it may be unable to deliver mail from early 2027.
The suspension is expected to save the service $2.5 billion in the current fiscal year. USPS makes bi-weekly payments of approximately $200 million to fund the pensions. The agency confirmed that contributions to employees' separate Thrift Savings Plans will not be affected.
A Temporary Measure, Not a Solution
USPS emphasised that pausing pension payments is not a permanent fix. The agency stated it has implemented cost-cutting measures and sought new revenue streams but insists that legislative action from Congress is essential for its survival.
"Legislative action is desperately needed to return the Postal Service to profitability," the service said in its official FAQ document. The agency maintains the pause will have "no immediate detrimental impact" on current employees or retirees.