Pension reserve fund worth €10.8 billion

THE National Pension Reserve Fund lost 1.1% of its value between June and September.

But figures released yesterday by the fund show that it has increased in value by €334 million since the start of this year and is now worth some €10.8 billion.

NPRF commission chairman Donal Geaney said that difficult market conditions during the summer and early autumn had caused a pause in the rapid growth the fund had enjoyed since March 2003.

“Concerns about issues such as high oil prices and the strength of the US economic recovery have caused markets to stall.

While business fundamentals remain strong, it is likely that further progress in the short-term will depend on a resolution of the headline issues which are the subject of investor concern”.

However, over the third quarter the average managed pension fund actually showed gains, according to consultant Mercer.

The average pension fund gained 5.3% in the nine months to end September. The figures show that nearly €8 billion is invested in world equity markets, accounting for 73.6% of the total.

The rest is invested in bonds and held in cash.

The fund was set up by the Government in 2001 with the proceeds of the sale of Eircom and will not be cashed in until 2025 to pay for public pensions. Every year the Government will pump 1% of GDP to the pension fund, equivalent to around €1.2 billion.

Earlier this year Mr Geaney said that it may consider investing new funds in property and in public private partnerships.

The latest quarterly figures may be disappointing, but at one stage in 2002 the fund lost nearly €1 billion of its value because of the equity market slump and depressed economic growth around the world.