WASHINGTON -- Pen pals, rejoice! Postal rates are likely to remain the same for another four years, thanks to money freed up from a retirement fund that the Postal Service had been overpaying.
Rates for postage last went up in June, and postal officials said they didn't expect another increase until 2004. But they stretched their estimate Tuesday after announcing details from a new financial review.
That inspection revealed the Postal Service had been paying too much into the Civil Service Retirement System fund, which provides benefits for employees who joined the service by 1987. Postal workers who joined after that year were enrolled in another retirement system.
The review examined retirement payments since 1971 and determined that the post office is close to having paid off what it owes the fund for current and future retirees. The analysis revealed that the Postal Service's liability to the retirement account is about $5 billion, rather than the $32 billion it believed it owed.
"The change was primarily driven by higher than expected yields on pension investments made by the Department of the Treasury," Postmaster General John Potter told the service's Board of Governors on Tuesday.
He warned, however, that "no one should be lulled into a sense of complacency that all is right with the nation's postal system. That's simply not true. The nation still faces a long-term challenge to continue postal services."