Pitney Bowes (PBI)

13. Retirement Plans and Nonpension Postretirement Benefits

We have several defined benefit and defined contribution retirement plans covering substantially all employees worldwide. Benefits are primarily based on employees’ compensation and years of service. Our contributions are determined based on the funding requirements of U.S. federal and other governmental laws and regulations. We use a measurement date of December 31 for all of our retirement plans.

U.S. employees hired after January 1, 2005, Canadian employees hired after April 1, 2005, and U.K. employees hired after July 1, 2005, are not eligible for our defined benefit retirement plans.

We contributed $30.5 million, $28.1 million and $22.6 million to our U.S. defined contribution plans in 2007, 2006 and 2005, respectively.

13. Retirement Plans and Nonpension Postretirement Benefits

We adopted the provisions of SFAS 158 at December 31, 2006. SFAS 158 requires recognition of the overfunded or underfunded status of pension and other post retirement benefit plans on the balance sheet. Additionally, gains and losses, prior service costs and credits, and any remaining transition amounts under SFAS 87 and SFAS 106 that have not yet been recognized through net periodic benefit cost are recognized in accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic cost. The following table illustrates the incremental effect of applying SFAS 158 on individual line items in the Consolidated Balance Sheets at December 31, 2006:

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