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USPS freezes pension contributions, sounds alarm over looming financial crunch
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The United States Postal Service is suspending employer pension contributions for workers beginning Friday, citing a looming cash shortfall, the agency announced Thursday.
The move, which affects the Federal Employees Retirement System (FERS), comes just weeks after the Postal Service warned Congress it could run out of cash in under a year without significant reforms, including changes to pension funding and stamp prices.
USPS emphasized that the pause will have no immediate impact on current or future retirees.
“There will not be any immediate detrimental impact to our current or future retirees if normal FERS cost payments are temporarily withheld,” Postal Service Chief Financial Officer Luke Grossmann said.
POSTAL SERVICE SAYS CASH COULD RUN OUT IN UNDER A YEAR WITHOUT CHANGES
A United States Postal Service worker delivers packages on Cyber Monday in New York Dec. 1, 2025. (Bess Adler/Bloomberg via Getty Images / Getty Images)
USPS has previously reported mounting losses over the years, totaling $118 billion since 2007, as volumes of its most profitable product, first-class mail, fell to their lowest levels since the late 1960s.
The financial strain was further exacerbated by global tariffs, high inflation and recent spikes in gasoline prices, along with growing competition from private carriers such as Amazon, which now delivers many of its own packages.
USPS said it typically sends the Office of Personnel Management (OPM), which oversees federal retirement accounts, about $200 million every two weeks to cover pension costs.
By suspending the payments, the agency expects to free up roughly $2.5 billion in the current fiscal year.
While the agency has suspended its employer contributions, it said it will continue transferring employee payroll deductions into retirement accounts.
USPS COULD SLOW SERVICE IN CERTAIN AREAS AS IT SEEKS TO CUT COSTS
An Amazon Inc. package sits on a conveyor belt at the United States Postal Service Merrifield processing and distribution center in Merrifield, Va., Dec. 19, 2018. (Andrew Harrer/Bloomberg via Getty Images / Getty Images)
Separately, the agency said its Thrift Savings Plan (TSP), a separate retirement savings program similar to a government 401(k), remains unaffected.
USPS will continue processing employee-funded contributions and matching funds into the Thrift Savings Plan (TSP), and noted that workers will be able to contribute more in 2026 under new IRS limits.
Postmaster General David Steiner testified before Congress on the current state of the U.S. Postal Service. (Pool)
In March, Postmaster General David Steiner told a House Oversight subcommittee that the Postal Service could run out of cash within a year without major changes.
Steiner outlined potential cost-cutting steps, including reducing six-day delivery, raising first-class mail prices from 78 cents to $1 or more and expanding borrowing authority after USPS hit its $15 billion debt cap.
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“In order to survive beyond the next year, we need to increase our borrowing capacity so that we don’t run out of cash,” Steiner said in prepared testimony. “The failure to do this could lead to the end of the Postal Service as we know it now.”
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Deputy Prime Minister Phiphat confirmed that contracts for the high-speed rail and U-Tapao Airport projects will remain unchanged. The government plans to boost investment in the Eastern Economic Corridor and attract international tourism.
Key Points
- Deputy Prime Minister Phiphat Ratchakitprakarn confirmed that contracts for the high-speed rail project and U-Tapao Airport development will remain unchanged, as amending them could lead to legal challenges from other bidders.
- The post-pandemic period has seen passenger numbers fall below initial estimates, prompting the government to focus on increasing investment in the Eastern Economic Corridor instead of revising contracts.
- Plans include inviting investors for large-scale entertainment and sports complexes (excluding casinos) and attracting major international theme parks to enhance tourism, support airport usage, and advance both projects into construction to boost economic growth.
Deputy Prime Minister and Transport Minister Phiphat Ratchakitprakarn said the government will not amend contracts for the high-speed rail project linking three airports or the U-Tapao Airport development, confirming that both projects will proceed under their original terms. The deputy premier said any changes could lead to legal challenges from other bidders involved in the tender process.
Deputy Prime Minister Phiphat said the post-pandemic period has affected earlier projections, with passenger numbers expected to fall below initial estimates. Instead of revising contracts, the government plans to increase investment in the Eastern Economic Corridor to boost demand and support the usage of both projects.
Authorities, as part of this approach, are preparing to invite investors to develop large-scale entertainment and sports complexes in the area, with no casino operations included. Plans also include attracting major international theme parks to create new tourism destinations and increase traffic through U-Tapao Airport and the rail system.
Phiphat stated that once the new government formally delivers its policy statement, the Eastern Economic Corridor Office will begin engaging foreign investors in coordination with relevant agencies, advancing both projects into the construction phase and supporting economic growth.
Source : Thai Govt Keeps Rail and U Tapao Projects Under Original Terms
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