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.

IAPF: Irish pensions value surge despite levy

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.

“With bonds providing very low or negligible returns, schemes are under pressure to find assets that provide returns but maintain risk at acceptable levels,” said IAPF chief executive Jerry Moriarty.

Mr Moriarty said the IAPF would monitor developments in the recently liberalised UK pensions market before recommending whether similar actions should be accelerated here. The IAPF said the number of defined benefit schemes has continued to fall, from 260,000 seven years ago to 130,000 at the end of last year.

More in this section

Budget 2022 Logo

What impact will this  year's budget have on you and your business.

IE logo
Devices


UNLIMITED ACCESS TO THE IRISH EXAMINER FOR TEAMS AND ORGANISATIONS
FIND OUT MORE

The Business Hub
Newsletter

News and analysis on business, money and jobs from Munster and beyond by our expert team of business writers.

Sign up
Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day. PS ... We would love to hear your feedback on the section right HERE.

Lunchtime
News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Some of the best bits from irishexaminer.com direct to your inbox every Monday.

Sign up