Adjustment pension plan PostNL results in higher indexation

Based on a joint decision by PostNL, Pension fund PostNL and the trade unions, PostNL’s pension plan will be improved for all participants in the pension fund. As a result of the adjustment of the plan, combined with the solid financial position of the pension fund, it is now possible to increase pensions by 10% as per 1 January 2023 (indexation).

PostNL is pleased to have reached this agreement with the pension fund and the trade unions BVPP, CNV and FNV. Pim Berendsen, PostNL’s CFO, says: “This is an important step for all participants in the pension fund. During the last couple of years pension increases have been very limited due to low interest rates and the financial position of the fund. A higher indexation is very necessary in this challenging financial environment, especially for our pensioners. They will see the impact of next year’s increase directly in their pension income.”

Adjustment pension plan required for higher indexation in 2023

To be able to increase pensions of (former) PostNL employees by 10%, it was decided to adjust the pension plan as per 31 December 2022. In the current plan indexation is capped at 4%. As part of the adjustment, the pension plan is now based on a collective defined contribution plan. Among others, this means that PostNL will be only required to pay the regular pension contribution, as the agreement for top-up payments and restitution has been cancelled. As a result, if the financial position of the pension fund would deteriorate, PostNL is no longer obliged to do top-up payments. At the same time, PostNL is also no longer entitled to restitutions, even if the financial position of the pension fund would allow for that. Parties view this adjustment as the best way to be able to increase pensions as of 1 January in line with inflation. And to keep up (future) purchasing power for all pension fund participants. 

Preparation for new pension law

PostNL, the pension fund and the trade unions also agreed on the implementation of the new pension law regulation, that is expected to become effective in the course of 2023. They agreed on a preferred contract that includes a contribution plan based on solidarity. Parties intend to transfer the accrued pensions into the new system. The transition will be accomplished entirely from the pension fund assets, with no financial contribution or compensation from PostNL. Further information will be provided by the pension fund in before 1 March 2023.

Accounting and financial consequences for PostNL 

Following the change towards a collective defined contribution plan, according to IFRS pension expenses will equal the contribution paid by PostNL to the pension fund as of 2023. This will not impact PostNL’s key financial indicator, normalised EBIT, in 2022. In 2022 pension expenses are substantially higher than the paid contributions. Following the adjustment of the pension plan, this gap disappears as of 2023. As a consequence, pension expenses will thus be substantially lower. Further accounting details will be explained in PostNL’s financial accounts for FY 2022. As part of the agreement, the unconditional funding obligation has been adjusted. The adjustment concerns a reduction of €20 million and an amended payment schedule (2022: €28 million; 2023: €16 million). On balance, this results in an improvement in PostNL’s adjusted net debt position of €20 million as per the end of 2022.