USPS to Suspend Payments to Employee Pension Plan to Free up Cash
Business Insider • • general
Key Points:
- The US Postal Service (USPS) will temporarily halt payments to its Federal Employees Retirement System pension plan starting Friday to address an impending liquidity crisis that could deplete cash by February 2027.
- USPS CFO Luke Grossmann emphasized that the suspension will not immediately harm current employees or retirees, prioritizing operational liquidity over pension funding.
- The postal service lost $9 billion last fiscal year and recently agreed to reduce Amazon deliveries by 20%, highlighting ongoing financial challenges.
- Suspending pension payments is expected to save USPS $2.5 billion this fiscal year, but contributions to employees' Thrift Savings Plans will continue unaffected.
- USPS stated that this measure is temporary and urged Congress for legislative action to secure additional funding and restore the agency's profitability.
