Pension fund turns 1.1bn profit

Ian Guider

New figures from the National Treasury Management Agency

(NTMA), which oversees the fund, show it reversed the 737 million in losses it made in 2002 thanks to a surge in world stocks markets.

The value of the pension fund now stands of 9.56bn, up from the 7.42bn it was worth a year ago.

The Exchequer pumped a further 1.1bn into the fund and will continue to invest 1% of Gross Domestic Product each year to the NPRF. Since it was established in 2001, the fund has achieved a profit of 290m on the amount the Government contributed.

NTMA officials said the fund could have risen by even more during the year. Although there was an overall 12%% rise in the funds value, the price of bonds had grown by just 4.7% in the past 12 months compared to a near 20% jump in the value of shares.

NTMA chief executive Michael Somers said last night that it has held off on investing more in bonds as returns had been low last year.

The fund did, however, net a further 189m from hedging its exposure to foreign currencies.

The NPRF was set up three years ago to provide for public pensions from 2025 onwards. The Government saves 1% of GDP every year to fund. Around three-quarters of the working population will be paid from the NPRF when they retire. The NMTA said the money it has not yet invested in stocks or bonds could be used to finance public infrastructure projects.

Separately last night, the agency said that Ireland’s national debt has risen to 38bn, an increase of 1.7bn. Although, it added, that even with the rise the country has the second-lowest debt to GDP ration in Europe and the only country with lower borrowings was Luxembourg.