Private pensions lose out as NPRF rises 1.6pc
Published 14/01/2012 | 05:00
A WINNING bet that share prices would fall last year allowed the National Pension Reserve Fund to beat the private pension industry last year.
The fund, which is privately managed under the aegis of the NTMA, did not sell many shares but had taken out a two-year option which guaranteed a value for its equity holdings.
This helped the fund record a gain of 1.6pc last year, while the average private Irish pension fund lost 3.5pc.
Since being set up in 2001, the NPRF has recorded an annual return of 3.3pc, with the investment performance picking up since the crash of 2008.
Such a return, if sustained, would have made a significant contribution to the cost of future public pensions, but most of the fund's money has been used to provide fresh capital for AIB and Bank of Ireland.
Almost €21bn has been put into the two banks to cover their losses, of which €10bn was supplied last July.
The fund has €5.4bn left for investments, some of which the Government would like to see go into Irish infrastructure, and €9bn is set aside pending a review of AIB's situation.
The fund received €1.8bn from Bank of Ireland last year from dividends and the sale of shares to private investors.