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Monday, April 17, 2006

Accounting change could spur postal reform effort

"A proposal requiring all private and public entities to include pension costs in their annual financial reports 'heightens the urgency to get postal reform done,' according to a source close to the legislation lodged in a House-Senate conference.

The Financial Accounting Standards Board proposal requires all abiding firms, including the U.S. Postal Service, to report post-retirement benefit costs in its annual budget. Currently, the Postal Service reports its pension costs on a year-to-year basis, rather than accounting for the entire sum on an accrual basis.

Under the proposed FASB rule, the Postal Service would report a projected $60 billion for retiree health benefits, according to Gene Del Polito, president of the Association for Postal Commerce, a group representing direct mailers. The agency also would have to submit a plan detailing how it would pay for the reported costs. To generate that money, Del Polito said the Postal Service would have to raise its rates."

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