POSTAL RATE HIKE COULD BE DELAYED TILL 2006

Recalculation of Pension Fund Payments Cited for Freeze

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WASHINGTON (AdAge.com) -- The U.S. Postal Service today said the current postal rates could remain in effect until 2006, two years later than previously planned.

John Potter, the postmaster

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general, said the date for a new rate increase could be pushed back because a review of the Postal Service's pension fund found that the service needs to set aside considerably less money annually than it has been paying into it.

Last month Mr. Potter had said he didn't expect a rate hike "until well into 2004." Today he

If Congress approves the new pension fund calulations, the result would be a "stabilization" of postal rates until as long as 2006, Mr. Potter said.

Met with approval
Publishers and direct marketers, as expected, greeted the news with cheers.

"The MPA welcomes the excellent financial news," Nina Link, president-CEO of the Magazine Publishers of America, said in a statement. She said the MPA would support Mr. Potter's call for the legislation and again called for the appointment of a commission to study the postal system.

The Direct Marketing Association in its own statement said it was "pleased."

"We call on Congress to enact the necessary legislative change to fix this broken system quickly," said H. Robert Wientzen, president-CEO of the DMA. "We will work with the Postal Service and others to effect necessary changes which will ensure that the American mailing public receives the lowest possible mailing rates."

Mr. Wientzen warned the change offers a temporary reprieve and that without major reform, the Postal Service's problems will continue.

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