USPS Suspends $2.5 Billion in FERS Payments Through 2026 as Social Security Stays Unchanged
Updated
Updated · 24/7 Wall St. · Aug 2
USPS Suspends $2.5 Billion in FERS Payments Through 2026 as Social Security Stays Unchanged
3 articles · Updated · 24/7 Wall St. · Aug 2
Summary
$200 million in biweekly USPS employer payments to the FERS defined-benefit fund were halted effective April 10, a temporary move the agency says will conserve about $2.5 billion through fiscal 2026.
USPS says the suspension affects only its employer pension contributions: employee FERS deductions, Thrift Savings Plan deposits, agency TSP matching up to 5%, and Social Security payroll taxes are still being sent.
Social Security benefits for postal workers are not reduced by the pension pause because they are based on covered earnings and claiming age, not USPS funding of FERS; the 2026 COLA remains 2.8%.
Current retirees continue receiving FERS checks, and USPS says active workers will keep earning service credit, though the move leaves a longer-term funding dispute unresolved.
For workers nearing retirement, the biggest risk is claiming Social Security early out of fear — starting at 62 instead of 67 cuts benefits by roughly 30% for life.