Average pension up 12.5%

THE average managed pension fund increased by 12.5% in 2003, Coyle Hamilton states in its review of the Irish pensions market.

Funds recovered strongly during 2003 but were still recouping losses suffered during market falls of the previous three years, it said.

The group is upbeat about prospects for equity markets in 2004 and said the continued recovery would result in greater confidence in managed pension funds.

Kieran Kelly, managing director of the group’s employee benefits and investments division, said last year saw good progress in developing a national pensions strategy, with the introduction of Personal Retirement Savings Accounts (PRSAs) and the setting up of the Pensions Ombudsman.

But the company warned the low take-up of PRSAs would need to be boosted by an improved communications programme to encourage a culture of making provision for retirement income. Mr Kelly said PRSA take-up had been low so far but that employee responses were more positive in cases where employers also made a contribution to PRSAs.

Recent figures from the Pensions Board showed over 19,000 PRSAs had been opened by the end of December, with contributions totalling €41 million.

The new Pensions Ombudsman meant pension schemes were now obliged to have internal rules for resolving disputes relating to pensions. The new office would allow for greater transparency in the pensions sector and instil greater confidence in the management of pension schemes, according to the company.