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USPS Halts Employer Pension Payments, Moves to Raise Postage in Cash Squeeze

The move buys time for operations during a severe cash squeeze.

Overview

  • USPS, which disclosed the pause Thursday, will stop its roughly $200 million biweekly employer payments to the federal pension program starting Friday, freeing about $2.5 billion this fiscal year.
  • Regulators approved a temporary 8% surcharge on Priority Mail and other packages effective April 26, with the add-on running through January 17, 2027.
  • The agency also filed to lift the price of a First‑Class Forever stamp to 82 cents on July 12, a step that still needs Postal Regulatory Commission approval.
  • Leaders warn cash could run out by February 2027 and are pressing Congress to raise the $15 billion borrowing cap and grant broader pricing flexibility, while regulators granted waivers easing pension funding that could free more liquidity through 2030.
  • USPS says retirees and current workers will see no immediate change to benefits as employee pension deductions and Thrift Savings Plan contributions continue, a stopgap after years of losses and a sharp fall in first‑class mail.