Stock market turbulence puts pressure on pension trustees

STOCK market turbulence has put significant pressure on pension fund trustees to evaluate how their funds are managed, a pensions specialist has said.

Last year all Irish funds recorded negative growth with a sizeable 11.3% gap between the best and worst pension fund performers It was the second year in a row that Irish pension funds recorded negative returns and the third year that stock markets were down. Stock markets have been through the worst investment cycle since 1941 and the current turmoil raises fundamental questions for pension fund trustees an expert has warned.

The head of Mercer Investment Consulting, Tom Murphy, told delegates attending its annual investment conference in Dublin: Investor confidence is at an all time low and there are still many uncertainties hanging over the markets. Given the gap that occurred last year Mr Murphy said it was becoming imperative that trustees carry out due diligence on fund managers at regular intervals.

While the fund management figures have already been published for last year Mr Murphy said trustees should realise the gap between top and bottom performers was a compound 30% in the last three years. Given the investment options open to fund mangers Mr Murphy said pension funds should consider splitting their funds between at least two fund managers to give the fund the best possible growth opportunities.