The U.S. Postal Service has temporarily suspended its employer contributions to federal employee retirement annuities (FERS) to address a severe liquidity crisis, ensuring it can continue payroll, pay suppliers, and deliver mail. While employee contributions, TSP, and Social Security payments will continue, and current/future retirees are not immediately impacted, the move highlights the USPS's dire financial state, exacerbated by declining mail volume and legislative constraints.
The U.S. Postal Service (USPS) announced it will temporarily suspend its employer contributions to the Federal Employees Retirement System (FERS) annuities, effective immediately, to maintain critical operations including payroll, supplier payments, and mail delivery. This drastic measure, echoing a similar deferral in 2011, is deemed necessary to prevent a more significant risk to postal operations due to insufficient liquidity. USPS clarified that current and future retirees will not be immediately affected, and it will continue transmitting employee retirement contributions, Thrift Savings Plan contributions (including employer matching), and Social Security contributions. This decision comes amidst a broader financial struggle for the USPS. The Postal Regulatory Commission recently granted a multi-year waiver allowing the redirection of billions in revenue previously earmarked for retiree benefits. Postmaster General David Steiner has also called for an increase in the USPS's borrowing cap from $15 billion to $34.5 billion, greater flexibility in retirement fund investments, changes to pension obligation methodology, and the authority to raise postage prices to cover losses. Brian Renfroe, President of the National Association of Letter Carriers, while calling the suspension "not ideal," stated that members understand the financial challenges and prefer this move over actions that would directly impact them or service quality. He attributed the situation to "continued inaction by Congress" regarding legislative restraints on the Postal Service. The USPS faces plummeting mail volume, down from 220 billion pieces in 2006 to 110 billion today, largely due to digital communication. Despite a slight increase in operating revenue from services like Ground Advantage, net losses totaled $9 billion in fiscal year 2025 and $9.5 billion in 2024. Advocacy groups like "Keep Us Posted" are urging Congress to limit rate increases and ensure six-day-a-week mail service, while the USPS maintains its proposed price increases will keep rates affordable.
