Last year, the IBA told an Oireachtas Finance Committee that the removal of many of the restrictions on what Irish pension funds can invest in, domestically, could result in an extra €7bn being pumped into the economy over the coming years.
Their call was based on building Irish business through private equity investment, financing Government through investment in national debt and incentivising infrastructure through long-term investment.
IBA chairperson Aidan McLoughlin told yesterday’s sitting of the Joint Oireachtas Committee on Social Protection that, although the second element of that call has been dealt with through the NTMA sovereign annuity bond issue (due to be launched at the end of this month), no other real positive steps have been taken to improve the ability of Irish pension funds to invest in private equity here.
“We take this opportunity to ask those who can move this matter forward to consider it as a matter of urgency,” Mr McLoughlin told the Committee. “Our third proposal, investment in infrastructure, has now had a major obstacle [the decision, by the State, to extend the rate of drawdown on approved retirement funds/ARFs to 5% per annum] put in its path. If it remains, we believe this initiative could effectively be dead.”
“If you include the value of the National Pension Reserve Fund, the total value of assets held in funded Irish pension schemes exceeds €100bn. This ‘golden goose’, if properly managed, has the ability to lay a series of golden eggs for the benefits of Ireland as a whole,” according to Mr McLoughlin.