The U.S. Postal Service has temporarily suspended payments to workers' retirement plans, citing the agency's ongoing financial woes.
The Postal Service told the Office of Personnel Management the Postal Service Board of Governors had opted to temporarily suspend its contributions to the Federal Employees Retirement System "to conserve cash and preserve liquidity due to its ongoing, severe financial crisis," the agency said in a news release on Thursday, April 9.
USPS usually pays about $200 million every other week to OPM for the employer's contributions to the Federal Employees Retirement System annuity, the agency said. The suspension of those payments, effective Friday, April 10, will free about $2.5 billion in the current fiscal year, the agency added.
Employee contributions to the retirement system will continue, and USPS will continue to pay employer automatic and matching contributions and employee contributions to the Thrift Savings Plan. Other payments, such as those to Social Security, will also continue, the agency said.
Postal Service Chief Financial Officer Luke Grossmann assured current and future retirees would not face "any immediate detrimental impact" from the action. “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 a statement.
