The board of the State transport company CIÉ is about to decide how its €1.2 billion pension fund will be managed.
The fund is one of the biggest in the State and management of it was put out to tender earlier this year. A spokesman for CIÉ confirmed the tender process was under way and added that a recommendation was likely to be made for next month's meeting of the group's board.
AIB Investment Managers has been the sole manager of the CIÉ pension fund since 1994. But it was decided earlier this year that under EU public procurement requirements, the fund would be split and put out to tender. It is understood that the fund has sought tenders for both active and passively managed mandates, with both split 75 per cent to global equities and 25 per cent euro-zone bonds.
The intention, it is thought, is to split the fund into two €600 million mandates, one active global and one passive global although the final division will be decided after the presentation from Irish and overseas fund managers pitching for the CIÉ mandates. Given the size of the business, overseas fund managers are expected to have pitched aggressively - possibly in joint ventures with Irish fund managers.
While a spokesman would make no comment, it is understood that AIB Investment Managers tendered and was one of the four fund managers shortlisted for each mandate. The restructuring of the fund comes just two years after CIÉ amalgamated four separate funds into a single fund which incorporates a €700 million contributory scheme and a €500 million additional contribution scheme. The CIÉ fund has 8,300 members, 5,900 pensioners and 480 deferred members.
EU public procurement requirements are likely to mean that the major State and semi-state occupational pension schemes will periodically have to review their fund management arrangements and re-tender their assets for management at regular intervals - possibly every three or five years.
The CIÉ fund is the second major State pension asset to be put out to tender. Earlier this year, the National Pension Reserve Fund - which was established to part-fund public service and social welfare pensions from 2025 onwards - awarded mandates worth €3.6 billion.
