GSP 03-23 An Post Superannuation Scheme-Review
30/January/2023
Description
I am pleased to advise you that, following a Labour Court recommendation (copy attached), the CWU, supported by AHCPS and Forsa, has been successful in our efforts to significantly restore pensionable pay and allowances.
Set out below is a full explanation of the details of what has been agreed and I would encourage you to read this circular carefully. The key outcomes on pensionable pay and allowances are:
Restoration of Pensionable Pay
Increases in pensionable pay to all members of the scheme as follows:
- 5% backdated to the 1st January 2022
- A further 1% increase effective from the 1st July 2023
Pensionable Allowances
All current pensionable allowances restored to 100% pensionable and will not be subject to the “cap” going forward. The Change Allowance will remain at the agreed 83.67% level.
Together with the provision of our current pay agreement this has delivered an accumulative 10.23% increase in the pensionable pay scale for 9,000 employees. This will narrow the gap to 3.75% as of the 1st July 2023.
In respect of the 7,000 Pensioners, dependents and deferred members, the achievement of the above pensionable increases will be passed on to them. Essentially, the agreements concluded by the CWU has resulted in the same increase of 10.23% over 18 months.
There are other important outcomes of the agreement which are detailed below.
Background and Further Details
In 2013, agreement was concluded between the An Post Group of Unions and the Company, on a Pension Accord designed to address the serious shortfall in the value of the An Post Superannuation Scheme. The agreement limits increases in pensionable pay to the lower of:
- the actual basic pay/salary increase, if any; or
- the increase in the Consumer Price Index (CPI), if any; or
- 2%.
This has resulted in a widening gap on pensionable increases, for current members (employees), retired members and deferred members of the scheme. As of the 1st January 2022 this equates to 9.25%. The 2.5% pay increase, effective 1st January 2023, attracts a 2% pensionable increase which is in the process of securing Ministerial approval for payment.
Review
The Pension Accord includes a review provision in the event of significant under – or over-performance. Furthermore, the Union/Company pay agreement, concluded with the assistance of the WRC in 2021, committed to a review of “the sustainability of the widening gap between base pay and pensionable pay.”
Actuarial Valuation Report – Mercer
An Actuarial Valuation Report prepared by Mercer for the three-year period up to the 1st January 2022, issued on the 30th September 2022, confirms asset valuation of €4,079.1m and accrued liabilities of €3,575.8m, leaving a surplus of €503.3m.
Detailed and extensive discussions have taken place between the Union and Company on a wide range of issues on how to make the best use of the surplus. Independent professional advice and assistance was provided by Byrne Actuaries. Although agreement on a range of issues was achieved, it was necessary to have a number of issues referred for examination by the Labour Court.
Arising from this, I am very pleased to outline (in addition to the points above) the outcome of discussions and the agreement with An Post which include:
Actuarial Reduction
Members that wish to retire before the normal retirement age of 66, will have a similar improved actuarial reduction applied to their lump sum and pension.
Superannuation on Health Grounds
The existing formula for superannuation on health grounds will be extended to the age at which the employee will reach their normal retirement age up to age 66 for those with a normal retirement age of 66.
State Pension Offset
The existing arrangement which was not changed in the Accord, remains in place, but will be subject to further review and examination between the Company and Unions.
Purchase of Service
Agreement on the cost of purchasing service with agreement that all members purchasing service will be fully advised of the costs involved.
Company Contribution
The Company contribution funding rate of 8% will apply to 31st December 2024.
Contingent Asset
The Contingent Asset (Lien on company property), held by the scheme to meet the minimum funding standard, is no longer required and will be released.
In endorsing the above terms, the Executive Council is satisfied the focus and aim of the Union to significantly reduce the gap has been achieved.
We will include a comprehensive explanatory insert, including the separate AVC scheme in the Connect magazine next May.
We have confirmed agreement of the above and requested the Company seek the required Ministerial approval, to enable early application and payment. If there is any indication that the payment will be delayed, rest assured, I will not hesitate to write to the Minister for Communications to resolve the issue as I have done with the last increase.