US Postal Service Suspends Pension Contributions Amid Cash Crunch

The move aims to preserve liquidity and avoid running out of cash by 2027.

Apr. 9, 2026 at 7:36pm

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A minimalist studio still life photograph featuring a stack of U.S. Postal Service envelopes and packages arranged elegantly on a clean, monochromatic background, using dramatic lighting and shadows to symbolize the Postal Service's financial challenges.The U.S. Postal Service's financial woes have forced it to suspend employer contributions to worker pensions, a last-resort move to preserve liquidity and avoid running out of cash.Kokomo Today

The U.S. Postal Service has announced it will temporarily suspend its employer contributions to Federal Employees Retirement System annuities, effective immediately. This step is meant to preserve cash and liquidity due to the Postal Service's 'ongoing, severe financial crisis.' While current and future retirees will not be immediately impacted, the Postal Service says the risk to its operations outweighs any longer-term risk to the pension funds.

Why it matters

The Postal Service has faced declining mail volumes and rising costs for years, leading to significant financial challenges. This suspension of pension contributions is a last-resort measure to avoid running out of cash and ensure the USPS can continue delivering mail and packages to the American public.

The details

The Postal Service said it will continue transmitting employees' retirement contributions to the federal Office of Personnel Management, along with Thrift Savings Plan contributions, including employer automatic and matching funds. It will also maintain its employer contributions to Social Security. The Postal Regulatory Commission has also granted the USPS a temporary, multi-year waiver allowing it to redirect billions of dollars in revenue previously earmarked for retiree benefits.

  • The suspension of employer contributions to Federal Employees Retirement System annuities will take effect on Friday, April 10, 2026.
  • The Postal Service has warned it is on course to run out of cash by around February 2027.

The players

U.S. Postal Service

The independent federal agency responsible for providing postal services in the United States.

Luke Grossmann

Chief Financial Officer of the U.S. Postal Service.

Brian Renfroe

President of the National Association of Letter Carriers.

David Steiner

Postmaster General of the U.S. Postal Service.

Postal Regulatory Commission

The independent agency that regulates the United States Postal Service.

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What they’re saying

“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.”

— Luke Grossmann, Chief Financial Officer, U.S. Postal Service

“Given a menu of options, none of which are overall positive, they would certainly prefer the Postal Service making a move like this as opposed to something that immediately impacts them or immediately impacts in a negative way the service that we provide to the American people.”

— Brian Renfroe, President, National Association of Letter Carriers

“That will buy us the time to make the fixes we need to make, and we can sail on down the road.”

— David Steiner, Postmaster General, U.S. Postal Service

What’s next

The Postal Regulatory Commission has granted the USPS a temporary, multi-year waiver to redirect billions of dollars in revenue previously earmarked for retiree benefits. This will provide the Postal Service with some financial flexibility as it works to address its long-term funding challenges.

The takeaway

The Postal Service's decision to suspend pension contributions highlights the severe financial pressures it is facing, driven by declining mail volumes and rising costs. While this move will help preserve cash in the short term, it underscores the need for Congress and postal stakeholders to work together on a comprehensive plan to ensure the long-term viability of the USPS.