IAPF: Irish pensions value surge despite levy

The body that represents the largest corporate pension funds and pension investment managers has said the value of savings held in pension schemes is now higher than before the crash, despite the Government extracting an estimated €2.5bn in levies over the last four years.

The Irish Association of Pension Funds said savings, including investment returns, have now surged in value to €107.8bn, up 70% since the end of 2008. With fewer people employed in the labour force, the numbers in pension schemes have however fallen to 733,027 at the end of last year from 852,119 in 2008.

Before the crash, pension savings were overly exposed to the domestic Irish stock market. When the crash came, financial stocks and pension funds were hugely affected. However, in its annual investment survey the IAPF says the picture has been transformed. Equities now account for 42.5% of investment allocation in defined benefit schemes and 52.2% in defined contribution schemes. That compares with an allocation of between 65% to 70% in equities before the crash. The conundrum of investment returns remains. The prolonged eurozone debt crisis, depressed economies and low and often zero inflation rates mean that government bond yields have slumped.