National Pension Reserve Fund still intact despite 4% drop in shares value

THE fall in the value of the National Pension Reserve Fund has been offset by interest earned while the money was being invested by fund managers, according to the National Treasury Management Agency.

Dr Michael Somas, NTMA chief executive, said despite a near 4% fall in the value of the shares invested, the fund was still intact.

“The fund at the end of June was down 3.95%. In terms of Irish managed funds, the average fund was down 9.96%. In fact, if you look at the position of this fund from the day it started, the principal that was put in is still intact. If the funds were cashed in the end of June, the interest earned and the reduction in the value of the stocks more or less offset each other,” he said yesterday.

The 7.7 billion fund has lost around 500 million on the value of 1,000 firms it invested in worldwide.

Speaking at the launch of the NTMA annual report the Minister for Finance, Mr McCreevy, gave his backing to the chairman of the NPRF, Donal Geaney, the former chairman of Elan. He said despite calls for Mr Geaney to resign because of an investigation into Elan’s accounting by the Securities & Exchange Commission, he was sticking by Mr Geaney and praised him for his commitment to the NPRF: “I am not going to ask Mr Geaney to resign. He has given an awful lot of commitment to the fund. As far as I am concerned, Mr Geaney has done an excellent job so far.”

The full National Pension Reserve Funds results will be announced by Mr Geaney next Tuesday.

The Minister added that he would not be changing the allocation to the fund (1% of GDP per annum) on the basis of economic performance, saying that it was a prudent decision to deal with accruing pension liabilities.

He would not say if he would use the remaining cash in the fund to invest in infrastructure projects, which might make a return. However, he noted that ‘nothing precludes the NPRF investing in anything’. Commenting on the NTMA’s new role at the State Claims Agency, which manages all lawsuits taken against the State and departments by individuals, Dr Somers said it had taken on 700 cases and in the first six months of operation another 500 had been filed. Around 94% of these claims are for personal injuries with 61% of this figure brought by State employees.

Of these a third are by prison officers, another third by civil servants and 22% by members, or ex-members of the Defence Forces. Thirty-three per cent of claims are made by members of the public.

As signalled at the end of last year, the National Debt continued to fall and Ireland now has the second lowest debt to GDP ratio in Europe at 38%.