USPS To Raise Market Dominant Rates in July 2026, Suspends Retirement System Contributions

The US Postal Service to increase prices for stamps and other Market Dominate products and temporarily suspend contributions to the Federal Employees Retirement System in emergency cash conservation plan amidst ongoing financial turmoil.

If the Postal Regulatory Commission approves, the new rates for Market Dominant products like First-Class Mail, Periodicals, USPS Marketing Mail, Package Services and selected Special Services will go into effect July 12, 2026.

The new rates include a 4-cent increase in the price of a First-Class Mail Forever stamp from 78 cents to 82 cents.

The additional-ounce price for single-piece letters will remain at 29 cents and rates for other Market Dominant services will go up on average about 4.8 percent.

Market Dominant products did not incur their usual increase in January and if this increase is approved, it should be the only one for these services this year as the Postal Regulatory Commission recently passed a rule limiting increases to once a year for these products.

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Value Added ResourceLiz Morton

But that limitation does not apply to Competitive products like Ground Advantage, Priority Mail, and Priority Express which saw their regular January increase, a recently announced additional 8% "temporary" fuel surcharge and regular rates also likely to rise again later this year.

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The move was not unexpected as USPS continues to grapple with significant quarterly losses,  recently telling Congress that the Postal Service will be out of cash by the end of 2026 without drastic action.

Toward that end, the Postal Service also announced today that it is temporarily suspending its employer’s contributions to the Federal Employees Retirement System in an emergency effort to conserve cash.

USPS begins cash conservation plan – USPS Employee News

USPS Link

The Postal Service will continue to withhold employees’ contributions to FERS and will transmit those amounts to the Office of Personnel Management along with employer automatic and matching contributions and employee contributions to the Thrift Savings Plan (TSP).

Importantly, the payments being suspended are to fund future benefits and USPS says current retirees will not be affected.

“There will not be any immediate detrimental impact to our current or future retirees if normal FERS cost payments are temporarily withheld,” said Postal Service Chief Financial Officer Luke Grossmann.

“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."

The Postal Service pays about $200 million every other week to OPM for the FERS annuity and expects the suspension of payments, which start April 10, to free up about $2.5 billion in the current fiscal year.

Beyond this temporary measure, USPS is urging Congress to take the following steps to help shore up its financial situation:

• Increase the Postal Service Borrowing Authority from $15 billion to $34.5 billion
• Reform Civil Service Retirement System (CSRS) Liability allocation methodology
• Provide flexibility in CSRS and FERS Retirement Funds Investment
• Enable Workers Compensation Reform

Consumer advocacy group Keep US Posted has pushed back on recent statements made by Postmaster General David Steiner, providing corrections and clarifications about the USPS' financial situation in a letter to the House Subcommittee on Government Operations.

Keep US Posted says USPS has a cost control problem, not a revenue problem, urging that any new reform legislation should follow three core principals:

• ACCESSIBILITY: Preserve the Universal Service Obligation requiring six-day mail and package delivery to every address.
• AFFORDABILITY: Limit rate hikes to once per year and keep them affordable for small businesses and consumers. A CPI-based price cap for Market Dominant products would require USPS to improve efficiency and live within its means. Any service reductions must be required to provide guaranteed savings.
• ACCOUNTABILITY: Strengthen the PRC’s oversight with binding authority over service changes and a dedicated customer advocate to ensure USPS improves efficiency and cost discipline to live within its means.

Or more succinctly put by Ross Marchand from the Taxpayers Protection Alliance: