The U.S. Postal Service is taking significant steps to preserve cash as it confronts what leadership describes as a severe and ongoing financial crisis that threatens long-term stability.
Beginning April 10, the agency is temporarily suspending its employer contributions to the defined-benefit portion of the Federal Employees Retirement System. Postal officials say the pause is intended to improve short-term liquidity and is expected to free approximately $2.5 billion during the current fiscal year. The move reflects growing pressure on USPS finances after years of structural losses and rising operating costs.
According to agency officials, the suspension applies only to employer contributions tied to the defined-benefit pension system. Employee retirement contributions will continue to be forwarded to the Office of Personnel Management as required. The Postal Service also confirmed that contributions to the Thrift Savings Plan, including employer automatic and matching payments, will remain in place. Employer contributions to Social Security are also expected to continue without interruption.
Chief financial leadership at USPS has indicated that the decision is part of a broader effort to manage cash flow and maintain operational stability. The agency has faced mounting financial strain driven by declining mail volumes, increased transportation expenses, and legacy obligations that continue to weigh on its balance sheet.
The move comes amid heightened warnings from postal leadership about the agency’s financial outlook. Postmaster General David Steiner has previously indicated that, without substantial changes, the Postal Service could face a liquidity crisis within the next 12 months. Internal planning discussions have included potential service adjustments, including the possibility of reducing mail delivery frequency from six days per week to five or fewer, depending on future financial conditions.
Alongside cost-containment efforts, USPS is also pursuing additional revenue measures. The agency has requested regulatory approval to increase the price of a First-Class Mail Forever stamp from 78 cents to 82 cents. The proposed adjustment is part of a broader pricing strategy aimed at offsetting ongoing losses and inflationary pressures.
In addition, USPS is planning a temporary surcharge of approximately 8% on certain postage services beginning April 26. The surcharge is intended to help offset rising transportation costs, which officials have linked in part to disruptions associated with the war involving Iran and its impact on global logistics and fuel markets.
The Postal Service reported a net loss of $9 billion for fiscal year 2025, underscoring the scale of its financial challenges. With cash reserves under pressure and expenses continuing to rise, USPS leadership is signaling that both cost reductions and revenue increases will likely remain central to its strategy in the months ahead.
