PostNL has to pay €84 million to top up its under-covered pension funds and could have tocontribute a further €49 million as well, it emerged today.
A Dutch ‘dispute committee’ has backed the company’s pension funds in a dispute between the twosides over what level of coverage the pension funds should have and whether additional top-uppayments are necessary or not.
Under the verdict, PostNL must pay €84 million to the funds. If the company appeals against thedecision, then an additional €49 million payment would be suspended.
By the end of the third quarter 2012, the coverage ratio of the main pension fund was 102.2%,including the top-up payments considered receivable from PostNL. This is below the minimumrequirement of 104.1%. PostNL’s pension coverage has fluctuated in recent years, dropping from highover-coverage levels in 2009 and 2010 to 100% last year and in Q1, 2012 and just 97% in Q2,2012.
The Dutch postal operator announced that the disputes committee has ruled in favour of thepension funds and decided that the payments are already necessary, regardless of whether thecurrently under-funded funds might recover in future without these payments.
PostNL said it is studying the verdict of the disputes committee and will decide later if itwill appeal the verdict. It will also start further consultation with the pension funds because itaims to continue the cooperation which is in the interest of all parties concerned.
Reduction of the pension costs and the risk of additional top-up payments remain important,PostNL stressed. In addition to consultations with the pension funds, the company is also innegotiations with the trade unions.
The pensions issue has been a major uncertainty hanging over PostNL’s finances this year. Thecompany has recorded weak results due to declining mail volumes and the fall in the value of itsTNT Express stake, and has warned it might not pay a dividend next year.
In early November, when announcing its Q3 results, PostNL said the group’s overall underlyingcash operating profit for 2012 would be at the lower end of the €110 million to €160 million range,which would be a 2%-4% profit margin.
