USPS Suspends Pension Contributions and Seeks Stamp Price Increase Amid Financial Crisis
By Susan Haigh | The Associated Press
Published April 10, 2026
In a significant move aimed at addressing a severe financial crisis, the United States Postal Service (USPS) announced on Thursday that it will temporarily suspend its employer contributions to Federal Employees Retirement System (FERS) annuities. This decision is intended to conserve cash and maintain liquidity, enabling the USPS to continue making payroll, paying suppliers, and delivering mail without interruption.
Financial Pressure Prompting Suspension of Pension Payments
The USPS communicated this suspension to federal budget officials, with the change taking effect Friday. Chief Financial Officer Luke Grossmann, in an internal message to USPS employees, described the measure as necessary due to the Postal Service’s "ongoing, severe financial crisis." Officials have warned that the USPS might run out of cash by February 2027 if steps are not taken to improve its financial position.
Grossmann assured that current and future retirees will not be immediately impacted by the suspension of employer contributions. “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. The USPS last deferred pension payments in 2011 during an earlier financial crisis.
While employer contributions to employee pensions are being paused, the USPS will continue to transmit employees’ own retirement contributions to the federal Office of Personnel Management. It will also maintain employer contributions to the Thrift Savings Plan—including automatic and matching funds—and continue contributing to Social Security.
Postal Workers and Unions React
Brian Renfroe, president of the National Association of Letter Carriers, acknowledged the suspension is “not ideal” but emphasized it does not immediately impact his members, most of whom are covered by FERS. Renfroe noted that given a limited range of challenging options, union members prefer this approach over measures that could directly harm postal workers or degrade mail service to the American public.
Request for Postage Rate Increase
In conjunction with pension payment suspension, the USPS formally filed a request with regulators seeking to raise postage prices. Among proposals is increasing the price of a First-Class Mail Forever stamp from 78 cents to 82 cents. This proposed increase also includes postcards and international letters but still aims to keep US rates among the most affordable worldwide. The Postal Regulatory Commission must approve the postal rate changes.
Mail volume at the USPS has fallen dramatically over the past two decades — from roughly 220 billion pieces in 2006 to about 110 billion today — driven by a shift to digital communication and electronic billing. Despite increased operating revenue by 1.2% in fiscal year 2025, primarily due to its Ground Advantage shipping service, the USPS posted a net loss of $9 billion that year, following a $9.5 billion loss in fiscal year 2024. ### Additional Financial Relief Measures and Legislative Challenges
Recently, the Postal Regulatory Commission granted the USPS a temporary, multi-year waiver allowing it to redirect billions of dollars in revenue previously earmarked for retiree benefits. This "breathing room" gives the USPS some financial flexibility to implement contingency plans and avoid a cash shortfall.
Postmaster General David Steiner has called on Congress to raise the USPS’s borrowing cap from $15 billion to $34.5 billion to secure necessary funding for long-term sustainability. He has also urged legislative changes to increase flexibility in retirement fund investment, adjust pension obligation calculations, and provide the authority to raise postage prices sufficiently to cover operational losses.
Renfroe attributed the current financial difficulties and need for drastic measures, such as suspending pension contributions, to ongoing legislative constraints and Congress’s lack of action to reform them.
Consumer Advocacy and Service Commitments
Consumer advocacy groups, like Keep Us Posted—which represents consumers, catalogs, and greeting card publishers—have urged Congress to limit stamp price increases to once per year and to ensure the USPS continues six-day mail delivery service. They also want postal regulators to have greater control over any changes to service levels.
The USPS emphasized that it relies primarily on postage sales, products, and services to finance its operations. The agency is taking steps to sustain its mission amid declining mail volumes and ongoing financial losses, aiming to remain reliable for the American public.
For more updates on this developing story and other news, visit NBC4 Washington.