Pension funds drop by 15%

IRISH pension funds have lost almost 15% of their value over the last 12 months.

This is according to new figures released by Rubicon investment consulting which said although the average return on pension funds last month was 0.2%, funds are still in the red this year by 7.5% on average.

The May figures continued a trend from the previous month when signs of hope returned to the pension funds market after steadily declining value in the market since the middle of last year.

Despite a good showing during the first six months of last year, when funds rose by 5%, they have been falling ever since.

Rubicon said Setanta Asset Management was the best performing manager last month with a 1.2% return recorded.

Hibernian Investment Mangers delivered the only negative performance over the month, declining 0.1%.

The figures also show the average managed fund has recorded a modest gain of 5.2% a year over the last three years.

Rubicon said the five-year return to the end of May remain strong, with the average managed fund delivering a return of 8.7% a year over this period.

"Due to the recent downturn in equity markets, Irish group pension managed-funds returns over the past 10 years have been a disappointing 3.9% per annum on average, compared with an Irish inflation rate of 3.8% per annum over the same period.

"When considering these returns it is important to remember that the investment horizon of most pension schemes is generally over 25 years and equities have historically provided significantly higher returns over the long-term than bonds, property or cash" Rubicon said in a statement.