US Postal Service Suspends Pension Contributions and Proposes 4-Cent Stamp Price Increase

The United States Postal Service announced on Thursday that it will temporarily suspend employer contributions to the Federal Employees Retirement System annuities, effective Friday. This measure aims to preserve cash for payroll, supplier payments, and mail delivery operations. The Postal Service cited its ongoing financial crisis as the reason for the suspension.

addition to the pension suspension, the USPS filed a notice with the Postal Regulatory Commission on Friday to increase postage rates.

The proposal includes raising the price of a First-Class Mail Forever stamp from 78 cents to 82 cents, effective July 12. Other changes would affect postcards and international letters. The USPS will continue transmitting employee retirement contributions to the Office of Personnel Management, along with Thrift Savings Plan and Social Security contributions.

The USPS previously deferred pension payments in 2011 during another financial crisis. Ninety-nine percent of career USPS employees are covered by the Federal Employees Retirement System. Current and future retirees will not face immediate impacts from the suspension.

An advocacy group has called on Congress to limit rate increases to once per year and maintain six-day-a-week mail service. Officials recently requested that Congress raise the USPS borrowing cap from $15 billion to $34.5 billion. They also advocated for changes in retirement fund investments, pension methodologies, and authority to set postage rates sufficient to cover losses.

The USPS finances its operations primarily through postage sales, products, and services. Mail volume has declined due to online bill payments and communication. Fiscal year 2024 net losses reached $9.5 billion. The proposed rates would keep USPS postage among the most affordable globally. The agency operates as an independent entity established over 250 years ago.