Irish pension funds assets grow by 25%

Irish pension funds assets grew by 25 per cent last year, as investment returns exceeded 21 per cent as companies topped up plans to improve scheme solvency.

A total of €77.9 billion was invested in Irish funds at the end of last year, according to the annual Irish Association of Pension Funds (IAPF) asset allocation survey. Passive investing is becoming a growing feature of the pension investment market, accounting for 27.8 per cent of all assets in 2005, up from 25.8 per cent a year earlier.

Equities continue to dominate, accounting for 65 per cent of assets under management. Fund managers remain considerably overweight in the Irish market, a move that has paid dividends in recent years as the Dublin market outperforms its euro-zone peers.

At the end of 2005, 11.4 per cent of assets were invested in Irish listed stocks, down slightly from 12.2 per cent a year earlier. The Dublin market accounts for 39.6 per cent of total euro-zone holdings by fund managers.

"This is the best performance by Irish pension funds since 1997," said Fiona Daly, managing director of Rubicon Investment Consulting, which carried out the survey. IAPF chairman Joe Byrne said "many defined benefit funds will not have improved their solvency position when measured against the minimum funding standard as set down by the Pensions Board".