The Instant Web Companies (IWCO) Seeks Legislative Action on PL108-18 CSRS Act

Chanhassen, MN (December 16, 2003) — The Instant Web Companies (IWCO), an integrated direct mail services company, has announced that Jim Andersen, IWCO President and CEO, recently met with Minnesota legislators to pursue support for legislative action to correct shortcomings in PL108-18, the Postal Civil Service Retirement System (CSRS) Funding Reform Act of 2003. The Washington, D.C. meetings included Senator Mark Dayton, Congressmen James Oberstar and John Kline, and Joseph V. Kennedy, General Counsel of the Permanent Subcommittee on Investigations, on behalf of Senator Norm Coleman.

The meetings helped to build further awareness of the mailing industry and the negative impact of some elements of the CSRS Act. Left unresolved, the CSRS issue is expected to lead to double-digit postage increases, which would reverberate through the entire industry. Postage increases usually result in reduced mail volumes affecting paper companies, printers, envelope manufacturers and mailers — companies that provide 9 million jobs, $900 billion in commerce and 9 percent of the gross domestic product.

"Congress must address United States Postal Service funding for the CSRS including funding of military pensions," said Jim Andersen, IWCO President and CEO. "Not addressing this issue will put an unfair burden on ratepayers. Congress must take a strong stance that this is a taxpayer issue, not a ratepayer issue, to ensure the vitality of the entire mailing industry."

"I support the efforts of IWCO and their position on PL108-18, and will seek to build new legislation addressing both the escrow and military pension issues in the next session," said Senator Mark Dayton. "IWCO is just one of several Minnesota companies whose livelihood, and the livelihood of thousands of employees, depends on a healthy, competitive United States Postal Service."

At the heart of the CSRS debate is the funding of postal employee military pensions and the escrow of retirement "savings" (i.e. the difference between the corrected and uncorrected annual payment for CSRS retirement). The CSRS Act resulted in a policy change transferring $27 billion in postal employee military pension payments from taxpayers to postage ratepayers. IWCO supports legislation that would return responsibility for these payments to the Treasury Department as is the case for all other government agencies.

The CSRS Act also created a revised retirement funding formula that requires billions of dollars to be held in escrow causing postage costs to rise sooner and by a larger amount. Business mailers could expect an increase in postage rates in 2006 of more than 10 percent (double the anticipated increase without the escrow provision), and additional increases would occur for every year the escrow account is maintained.

"We appreciate the support of Senator Dayton. Meeting with state legislators was just the first step in bringing this issue to the forefront," said Andersen. "We encourage other industry leaders to contact their state legislators to spark nationwide support on the PL108-18 issue. We also commend mailing industry organizations such as the Envelope Manufacturers Association (EMA) for initiating support for this much needed reform."

The Instant Web Companies, headquartered in Chanhassen, MN, has served the needs of North American direct marketers for more than 34 years. IWCO provides direct marketing like no one else by seamlessly integrating direct mail services from a primary campus resulting in streamlined production for all components – printing, plastics, envelope conversion and mailing. IWCO’s industry experience and technology along with proprietary IWCO P.O.S.T. (Postal Optimization Strategy and Technologies) and RideShare™ commingling and logistics management programs deliver dramatic postage savings and faster time to market.

Editor’s Note: Jim Andersen, IWCO president and CEO, is available for further comment on PL108-18 and the impact of escrow and military service issues on the direct mail industry.

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