The Treasury Department is halting investments into two federal retirement funds – the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund – after the U.S. hit its debt ceiling, Treasury Secretary Janet Yellen said in a letter to U.S. lawmakers on Thursday.
In her letter, Yellen said she had previously written the week before that the government was expected to hit the debt limit on Jan. 19. As a result, the department was taking “extraordinary measures.”
Part of these measures involve two federal retirement funds. The Treasury Department cannot fully invest money earmarked for the Civil Service Retirement and Disability Fund, outside of what beneficiaries must be paid immediately, Yellen wrote. Future investments will be suspended until June 5 during a “debt issuance suspension period,” during which point the department will also “redeem a portion of the investments,” she wrote.
Investments into The Postal Service Retiree Health Benefits Fund will also be suspended.
Both funds will be reimbursed when the debt threshold has been increased or suspended, and federal employees – retired or current – will not be impacted by these measures, Yellen said.
“As I stated in my January 13 letter, the period of time that extraordinary measures may last is subject to considerable uncertainty, including the challenges of forecasting the payments and receipts of the U.S. Government months into the future,” she wrote. “I respectfully urge Congress to act promptly to protect the full faith and credit of the United States.”