USPS pauses pension payments

The United States Postal Service stopped sending part of its pension money on April 10 because it says the bigger danger is running short of cash for payroll, suppliers, and daily mail operations. The skipped payment is the employer contribution for the defined-benefit side of the Federal Employees Retirement System, which covers postal workers and many other federal employees. (news.usps.com) This is not workers losing their own paycheck deductions. The Postal Service said it will still send employees’ retirement contributions and will still send the employer automatic and matching money for the Thrift Savings Plan, which is the 401(k)-style account used across the federal workforce. (news.usps.com) The number behind the move is about $200 million every other week. By stopping those checks for now, the agency says it can free up about $2.5 billion during the current fiscal year. (news.usps.com) Postmaster General David Steiner told Congress on March 17 that the Postal Service is less than 12 months from running out of cash if nothing changes. In separate reporting in early March, he said the money could be gone by February 2027, which turns this pension pause from an accounting choice into a short-term survival move. (federalnewsnetwork.com) (usatoday.com) The Postal Service is unusual because it is part of the federal system but mostly pays its own bills from stamps, shipping fees, and other service revenue. That means it does not work like a normal cabinet agency that can simply wait for an annual tax-funded appropriation when costs outrun income. (pbs.org) (wbur.org) The hole has been there for years. The Postal Service reported an $9.0 billion net loss for fiscal year 2025, after a $9.5 billion net loss in fiscal year 2024, even though revenue rose to $80.5 billion. (about.usps.com) One reason the math keeps getting worse is that the mail business keeps shrinking even when prices rise. In fiscal year 2025, First-Class Mail revenue rose by $370 million, but the number of pieces fell by 2.2 billion, and Shipping and Packages volume also dropped by 415 million pieces. (about.usps.com) The Postal Service’s own 2026 plan says total mail and package volume will fall another 7.2 billion pieces to 101.5 billion. That same plan says year-end cash could drop to $3.4 billion if it makes roughly $6.3 billion in year-end payments for the Civil Service Retirement System, the Federal Employees Retirement System, and retiree health obligations. (about.usps.com) Management has been trying to rebuild the network through the Delivering for America plan, which is supposed to cut costs by changing plants, transportation, and delivery routes. But in January 2025, the Postal Regulatory Commission said the plan relied on defective modeling, used overly optimistic savings estimates, and would downgrade service for 49.5 percent of ZIP Code pairs for single-piece First-Class Mail. (prc.gov) So the pension pause is the clearest sign yet that the Postal Service is choosing between long-term obligations and next week’s cash needs. When an institution that touches 168 million delivery points starts skipping $200 million checks to keep trucks moving, it is telling Congress that rate hikes and internal cuts have not closed the gap. (news.usps.com) (federalnewsnetwork.com)