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IWCO and Capital One Join Forces to Support Postal Reform

Press release from the issuing company

Chanhassen, MN (May 4, 2004) - The Instant Web Companies (IWCO), an integrated direct mail services company, continues to gather support for legislative action to correct shortcomings in PL108-18, the Postal Civil Service Retirement System (CSRS) Funding Reform Act of 2003, which would lead to double-digit postage increases if left unresolved. On April 29, representatives from IWCO and Capital One Financial Corporation met in Washington D.C. with Senator Mark Dayton and Joseph V. Kennedy, General Counsel of the Permanent Subcommittee on Investigations on behalf of Senator Norm Coleman, to continue their discussions regarding postal reform. IWCO invited representatives from Capital One to attend the meeting to represent the direct marketer's perspective on the postal reform issue. Capital One is the largest individual user of First Class Mail and relies on the United States Postal Service (USPS) to communicate with its existing customers as well as attract new customers. "IWCO and Capital One are just two examples of the devastating effect the postal reform issue would have on the entire mailing industry and its employees if left unresolved," said Jim Andersen, IWCO President and CEO. "While there are 1,000 jobs at stake at IWCO, we are also speaking for more than 200,000 Minnesota residents employed in the direct mail manufacturing industry. We will continue to lobby on behalf of postal reform until our voices are heard, and the industry is secure." IWCO has worked closely with Minnesota legislators to build awareness of the mailing industry and the negative impact of some elements of the CSRS Act. 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. "Last year, I met with IWCO to discuss postal reform and the impact it would have on dozens of Minnesota companies who depend on a healthy competitive United States Postal Service to keep thousands of employees working," said Senator Mark Dayton. "I will continue to support the efforts of IWCO and their position on PL108-18. I expect members of the Senate Governmental Affairs Committee to introduce legislation in the next month to reform the postal service." The CSRS Act created a revised retirement funding formula that requires billions of dollars to be held in escrow causing postage costs to rise by a larger amount than necessary. 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. The CSRS Act also transferred responsibility for $27 billion in postal employee military pension payments from taxpayers to postage ratepayers. IWCO and Capital One support legislation that would return responsibility for these payments to the Treasury Department as is the case for all other government agencies.