An Post pension deficit ruling due

An Post expects a ruling from the Pensions Board regarding its pension deficit solution agreement within the next month.

The State-owned postal services provider agreed a deal with its unions months ago to tackle its pension fund deficit — €229m at the end of last year — and submitted it for approval to the Pensions Board in recent weeks. A company spokesperson said that word is expected within the next month or so.

The solution, in part, will see a mortgage, relating to certain property assets of the company, put in place for use as a contingent asset of the scheme.

An Post in its 2013 annual report yesterday reported a near 35% reduction in losses, with turnover inching up to nearly €812m. Operating losses narrowed from €17.5m to €11.4m, before exceptional items. However, an exceptional credit of €17.1m — which related to the accountancy treatment of the change in the pension scheme, together with an offset providing for future voluntary severance and early retirement payments — resulted in an overall group operating profit of €5.7m and an after-tax profit of €5.9m for the year.

Chief executive Donal Connell said that the progress seen during the year has strengthened An Post as it faces the challenges ahead. “We continued to focus on cost containment, productivity and efficiency improvement, alongside strategic investment in revenue-generating business streams across letters, parcel, retail and financial services and group companies,” he added.

The company reported a record 22% growth in contract parcels and packet volume, driven by rising online shopping trends. Its State Savings fund grew by €1.9bn, to over €18bn, and now represents 16% of all personal savings in Ireland.

A continued fall in traditional mail volume was noted, but at 2% last year’s rate of decline marked a definite slowdown (the fall amounted to 5% in 2012).

An Post’s management said that “given the appropriate pricing regime and the work done on improving quality and cost efficiency in the core business” [cost reduction targets were met last year, partially through the reduction of 335 ‘full-time equivalent’ staff members] the business has repositioned itself “to a point where sustained profitability, into the future, is achievable”.