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Dáil Éireann debate -
Tuesday, 9 May 1989

Vol. 389 No. 7

Written Answers. - An Post Pension Fund.

122.

asked the Minister for Communications if he will give an assurance that An Post will not reduce its current contribution rate of 16.7 per cent to the company's pension fund on receipt of the £3 million Exchequer funding which the Government has agreed to provide to meet pension liabilities of former employees who have taken voluntary early retirement under the company's scheme; and if he will make a statement on the matter.

123.

asked the Minister for Communications, in view of the underfinancing of £7.4 million reported in the annual report and accounts for 1988 of An Post's pension fund since the company was established, if he will give an assurance that the company will make timely, proper and adequate provision to finance the pensions of current and prospective pensioners and that any Exchequer moneys paid to the company in respect of the Minister for Finance's liabilities in regard to pre-vesting day service of staff will be properly applied to the immediate reduction of the deficit in the pension fund rather than being used directly or indirectly to disguise the deteriorating trading performance of the company; and if he will make a statement on the matter.

I propose to take Questions Nos. 122 and 123 together.

An Post's current contribution rate of 16.7 per cent to the company's pension fund in respect of service given by its employees on and after vesting day (1 January 1984) is based on an actuarial report prepared in 1988. The pension fund is separate from the accounts of An Post and is managed by independent trustees, nominated by An Post, for the sole benefit of company employees and their dependants. The contributions of An Post to the fund may not be used by the company for any purpose other than payment of pension benefits.

As provided for in its Articles of Association, the company, with the permission of the Minister for Communications and the Minister for Finance, has built up to the required annual financing rate of 16.7 per cent by charging to the profit and loss account the following percentages of pensionable pay: 1984, 11.5 per cent; 1985, 12.5 per cent; 1986, 13.5 per cent; 1987, 16.2 per cent; 1988, 16.7 per cent. At 31 December 1988 the cumulative under-financing in the fund was approximately £7.4 million. The company is committed to making up this shortfall. As already published in An Post's annual report, the financing of the fund in future years will be increased to compensate for the under-financing following completion of the next actuarial report.

The payment of pre-vesting day pension entitlements, which is the liability of the Minister for Finance, has been delegated to An Post under the Postal and Telecommunications Services Act, 1983. Payments made by the company in accordance with such delegation are made out of the pension fund and must be re-imbursed by the Minister for Finance in any year in which income from the fund is insufficient, because of the delegation, to pay the pensions of that year.

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