The U.S. Postal Service forwarded a recommendation for a 5 to 6% rate increase to the Postal Board of Governors on Monday, said Postmaster General John E. Potter during his keynote address at the National Postal Forum held in Nashville, TN.
If the board approves, a formal filing for a rate increase will follow shortly, Potter said.
The postmaster said the increase would be necessary unless there is a change made to a new law calling for the establishment of a $3.1 billion escrow account that affects the postal service’s retirement system.
Absent the new requirement for the escrow account the U.S.P.S would have been able to use that money for operating expenses and put off a postage rate increase until 2007, Potter said.
The filing for a rate increase would be tied to the outcome of legislation to change the escrow retirement and if legislation is enacted to mitigate the requirement the U.S.P.S. expects to modify its filing for a rate increase, he said.
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