US Postal Service Suspends Pension  Plan Contributions

WASHINGTON - The U.S. Postal Service said on April 9th, it will temporarily suspend employer payments for a federal pension program to conserve cash amid a severe financial crisis.  USPS told the White House Office of Personnel Management that effective April 10th, it will stop making $200 million payments every other week for its employer contributions for the defined benefit portion of the Federal Employees Retirement System. USPS warned on April 9th, that without reforms it could run out of cash as soon as February.  USPS estimated it will save $2.5 billion with the action through September 30 and said there would not be any immediate detrimental impact on current or future retirees if the payments are temporarily withheld.  ⁠The service has ​reported net losses of $118 billion since 2007 ​as first-class mail, its most profitable product, has fallen to its lowest volume since the late ​1960s. USPS in February reported a quarterly loss of $1.25 billion.  Earlier this week, USPS won approval from the Postal Regulatory Commission for a temporary 8% price hike for priority mail and ‌package deliveries, effective April 26, to deal with rising transportation and fuel costs. USPS plans for the surcharge to be in effect through January 17.  

U.S. Postmaster ​General David Steiner ⁠told Congress last month that hiking first-class mail stamp prices to 95 cents or $1 or more, up from ​the current 78 cents, would provide added revenue and ​help it ⁠cut losses.

Stamp prices are up 46% since early 2019, when they were 50 cents, but Steiner said they are still far lower than in other countries.