More Red and Less Royal Green

Labor costs account for nearly 80 percent of the U.S. Postal Service's expenses.

Under the new business model created by PAEA, where costs become even more sharply scrutinized, the terms of postal worker compensation will be in sharper focus -- and likely dispute.

For a potential look at the future, examine what's happening in Britain's postal system -- Royal Mail -- which has announced substantial cuts to the future pensions of current postal workers. "The current cost of providing future service pensions is not sustainable," the Royal Mail said in announcing the cuts.

According to the BBC, pension adjustments to the Royal Mail represent the largest curtailment to a pension scheme in the entirety of the United Kingdom, in which existing members, not just new joiners, have been told by their employer that they must accept changes which will see them worse off.

Earlier this month the Royal Mail sent a 44-page booklet to every employee spelling out the impending changes.

They are:

• for a "career average" scheme to replace the current final salary version from 1 April next year
• for the standard retirement age to rise from 60 to 65 in 2010, though only for service after that date
• for new recruits, from January 2008, to be offered a separate "money purchase" scheme altogether
• for staff to keep contributing at 6% of salaries a year.

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