President Bush signed the Postal Civil Service Retirement System Funding Reform Act of 2003 into law yesterday, guaranteeing mailers at least three years without postal rate increases.
The law will allow the U.S. Postal Service to lower pension contributions to the CSRS after reviews found that the system was overfunded. Postal officials estimate that it will save $2.9 billion in fiscal year 2003 and $2.6 billion in FY 2004 through the change.
The postal service has said that it will use some of the savings to keep rates steady until 2006. Other savings will be used to pay down its $11.2 billion debt in fiscal years 2003, '04 and '05. Congress mandated that the savings cannot be used to pay for executive bonuses.
Without the lower pension contributions, postal officials would have begun seeking approval for the next rate increase this fall.
Meanwhile, postal officials reported that Standard Mail and Package Services volume are up, but other categories are declining.
From the start of the fiscal year last September through March 21, Standard Mail volume increased 4.6 percent, while Package Services volume was up 6.4 percent. However, First-Class mail was down 2.3 percent, and Periodicals fell 4 percent. Priority Mail reported the largest decline — 14.4 percent — followed by Express Mail, which was down 9.5 percent. International mail dropped just 0.9 percent.
Year-to-date revenue was $38.2 billion, a 5.6 percent increase over last year, but $819.3 million less than the postal service's plan. Still, net income was $1.68 billion, which was $314.6 million greater than plan. Helping the bottom line was the fact that expenses were $1.13 billion less than budgeted.
Total mail volume was 112.5 billion, up 0.6 percent compared to last year, but under plan by 1.8 billion mail pieces.
