The U.S. Postal Service announced Thursday it would temporarily suspend its employer contributions to the Federal Employees Retirement System annuities, effective today, as part of a cash conservation plan to address a severe financial crisis.

The move, which halts biweekly payments of about $200 million to the Office of Personnel Management, is expected to free up roughly $2.5 billion through the end of the fiscal year on September 30. Postal Service Chief Financial Officer Luke Grossmann stated that "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."

USPS emphasized that the suspension will have no immediate detrimental impact on current or future retirees, as the pension funds remain better funded than those of other agencies. Employee contributions to FERS, along with employer automatic and matching contributions to the Thrift Savings Plan and Social Security payments, will continue uninterrupted.

The agency has faced mounting losses, reporting a $9 billion net loss in fiscal year 2025 despite a 1.2% revenue increase, following $9.5 billion in losses the prior year. Cumulative losses since 2007 total $118 billion, driven by a plunge in first-class mail volume from 220 billion pieces in 2006 to about 110 billion today. Officials warn USPS could deplete its cash reserves by February 2027 without further action.

This is not the first such measure; USPS deferred pension payments during a 2011 financial crunch. The National Association of Letter Carriers attributed the current step to congressional inaction on reforms, including pension investment flexibility and increased borrowing authority, while noting no immediate effects on retirees.

To bolster revenue, USPS filed for a 4-cent increase on First-Class Mail Forever stamps, from 78 cents to 82 cents, along with hikes on postcards and international letters, pending Postal Regulatory Commission approval. The agency also secured an 8% temporary price increase on priority mail and packages effective April 26 through January 2027.

Postmaster General David Steiner has urged Congress for legislative relief, including adjustments to Civil Service Retirement System obligations and expanded borrowing limits from the current $15 billion cap. Without such changes, further cost-saving steps may be necessary to sustain operations.