USPS temporarily suspends pension contributions amid ‘severe financial crisis’

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FILE - A United States Postal Service (USPS) logo is seen on a mailbox in Washington, District of Columbia, May 27, 2025. (Photo by STR/NurPhoto via Getty Images)

The U.S. Postal Service said it was temporarily suspending contributions to employee pension plans in an effort to "conserve cash" due to an "ongoing, severe financial crisis."

What they're saying:

"There will not be any immediate detrimental impact to our current or future retirees if normal FERS cost payments are temporarily withheld," said Postal Service Chief Financial Officer Luke Grossmann. "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."

Big picture view:

Officials have warned the USPS is on course to run out of cash by around February 2027.

Dig deeper:

The temporary suspension will go into effect on Friday, but current and future retirees will not be immediately impacted, Grossman said. 

By the numbers:

The USPS estimated that it will save $2.5 billion through Sept. 30 with the suspension.

For the 2025 fiscal year, USPS’s net losses totaled $9 billion. The year before that, losses amounted to $9.5 billion.

The USPS reported these losses, which began in 2007 as first-class mail, its most profitable product, fell to its lowest volume since the late 1960s, according to Reuters.