An agreement between An Post and the company’s group of unions will result in an increase of 7 per cent for the more than 7,000 pensioners at the company hit in recent years by measures intended to restore financial stability to the its superannuation schemes.
The agreement will also eliminate the element of employee pay that was not considered pensionable, according to the Communications Workers’ Union.
The deal follows a review of the scheme conducted by Mercer and covering the three years to the end of 2024. It determined that after the agreement, €345 million would be retained in the fund for investment.
The deal will come as some good news for retired members of staff who have seen the value of their pensions eroded in recent years as inflation ran significantly above the 2 per cent cap on annual increases imposed on the scheme.
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Pensions at the company had previously been linked to the pay increases of working staff but that link was severed and since 2012, according to a group representing the retired staff, the pensions have increased by just over 15 per while pay has gone up by about 25 per cent.
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Under the terms of the deal, an increase of 6 per cent will be backdated to January 1st of this year with an additional 1 per cent backdated to the start of June.
CWU general secretary Seán McDonagh said on Thursday the union had told the company last year it would be seeking to eliminate the gap that had developed between pay and pensionable pay at the company as a result of recent agreements concluded against the background of concerns over the funding of the superannuation schemes.
“We have now succeeded in fully eliminating the gap with the effect that the full amount of pay increases secured over the last 3.5 years, are fully reflected as pensionable pay for An Post workers. We have secured an accumulated 22 per cent increase in pensionable pay, resulting in An Post pensioners seeing an additional 7 per cent increase to pensions in 2025,” he said.
The move is an exceptional one, however. Mr McDonagh said the 2 per cent cap in annual increases provided for in the Pensions Accord agreement between management and unions at the company remains for the moment.
“The Pension Accord will remain in place including the 2 per cent cap, as it continues to be important to ensure the sustainability of the scheme,” he said in a circular distributed to members. “In the current economic uncertainty, it would be reckless and irresponsible to consider changing this.
“The folly of some suggestions to abolish it would largely eliminate the surplus, creating additional implications from a funding, risk and investment perspective.
“The immediate consequence would result in no increases to either employees or pensioners. It would also trigger a full investment strategy review by the Trustees as this would be a fundamental change in the scheme’s funding position.”
