USPS is set to suspend pension contributions, seeks 4-cent stamp price hike

The US Postal Service said Thursday it has informed federal budget officials it will temporarily suspend its employer contributions to Federal Employees Retirement System annuities, allowing it to keep making payroll, paying suppliers and delivering the mail.The Postal Service also wants to increase postage rates, including raising the price of a First-Class Mail Forever stamp from 78 cents to 82 cents.USPS filed notice Friday with regulators, who still need to approve the changes.The step taken by the Postal Board of Governors to forgo the pension payments is meant to preserve cash and liquidity due to the Postal Service’s “ongoing, severe financial crisis,” Postal Service Chief Financial Officer Luke Grossmann said in an internal message to USPS employees.Officials have warned the USPS is on course to run out of cash by around February 2027.Despite the suspension of employer contributions, effective Friday, current and future retirees will not be immediately impacted, Grossman said.“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 in the statement.USPS deferred payments in 2011 during another financial crisis.The Postal Service said it will continue transmitting employees’ retirement contributions to the federal Office of Personnel Management, along with Thrift Savings Plan contributions, including employer automatic and matching funds, and will also maintain its employer contributions to Social Security.Brian Renfroe, president of the National Association of Letter Carriers, said the temporary suspension of annuity payments is “not ideal” but it doesn’t immediately impact his members, who he said understand the Postal Service’s financial challenges.“Given a menu of options, none of which are overall positive, they would certainly prefer the Postal Service making a move...