The U.S. Postal Service announced Wednesday it will suspend its employer’s contribution to the defined benefit portion of the Federal Employees Retirement System. In informing the Office of Personnel Management of the move, USPS says it is an attempt to conserve cash and preserve liquidity.
The announcement follows similar measures taken by other government-sponsored enterprises recently—as well as local and state governments—in the wake of lower tax revenue and cash strapped budgets as a result the economic downturn.
The Postal Service pays about $115 million every other week to OPM for the FERS annuity. It estimates the suspension of payments, effective June 24, will free about $800 million in the current fiscal year.
“We will continue to transmit to OPM employees’ contributions to FERS and also will continue to transmit employer automatic and matching contributions and employee contributions to the Thrift Savings Plan,” Anthony Vegliante, chief human resources officer and executive vice president, said in a statement.