The National Pension Reserve Fund lost more than 16% of its value on the stock market last year, according to its annual report for 2002.
The fund was established in 2000 to prepare for the future pension requirements of Ireland's ageing population.
Fine Gael said the 16% loss announced today amounted to €737m.
Party spokesman Phil Hogan said: "There should have been greater diversification of the funds into a wide range of funds which would limit the gamble and the potential losses that we've seen in these investments"
He said Finance Minister Charlie McCreevy must take the blame for the losses.
However, John Corrigan, the director of the fund, said it performed quite well compared to the average Irish pension investments. He said the average pension fund lost 18.9% of its value last year.