Updated April 9, 2026, 7:52 p.m. ET
The U.S. Postal Service has temporarily suspended payments to workers’ retirement plans, citing the agency’s ongoing financial woes.
The Postal Service told the Office of Personnel Management the Postal Service Board of Governors had opted to temporarily suspend its contributions to the Federal Employees Retirement System “to conserve cash and preserve liquidity due to its ongoing, severe financial crisis,” the agency said in a news release on Thursday, April 9.
USPS usually pays about $200 million every other week to OPM for the employer’s contributions to the Federal Employees Retirement System annuity, the agency said. The suspension of those payments, effective Friday, April 10, will free about $2.5 billion in the current fiscal year, the agency added.
Employee contributions to the retirement system will continue, and USPS will continue to pay employer automatic and matching contributions and employee contributions to the Thrift Savings Plan. Other payments, such as those to Social Security, will also continue, the agency said.
Postal Service Chief Financial Officer Luke Grossmann assured current and future retirees would not face “any immediate detrimental impact” from the action. “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,” he said in a statement.
The action isn’t a permanent solution to the USPS’ financial woes, the agency said in a talking points document. “Legislative action is desperately needed to return the Postal Service to profitability,” USPS said.
Recently appointed Postmaster General David Steiner has said he expects the USPS to run out of cash by 2027 without Congress’ help, including raising the agency’s statutory debt limit from $15 billion to $34.5 billion.
The move to temporarily suspend payments came after the Postal Regulatory Commission on Thursday gave the USPS a multiyear waiver to take actions that would provide “breathing room” amid its “deteriorating financial condition.”
USPS has reported net losses of $118 billion since 2007 as first-class mail, its most profitable product, has fallen to its lowest volume since the late 1960s. In February, USPS reported a quarterly loss of $1.25 billion.
USPS to raise prices on Priority Mail to help address costs
Earlier in the week, USPS won approval from the Postal Regulatory Commission for a temporary 8% price hike for priority mail and package deliveries, effective April 26, to deal with rising transportation and fuel costs. USPS plans for the surcharge to be in effect through Jan. 17, 2027.
Steiner told Congress in March that hiking first-class mail stamp prices, perhaps to $1 or more, up from the current 78 cents, would provide added revenue and help it cut losses.
Contributing: Michelle Del Rey, USA TODAY, and Reuters
Mike Snider is a national trending news reporter for USA TODAY. You can follow him on Threads, Bluesky, X and email him at mikegsnider & @mikegsnider.bsky.social & @mikesnider & msnider@usatoday.com.