Strong investment returns and rising bond yields have provided a buoyant first quarter for Irish pension schemes.

Pension funds reported an average gain of 5.4 per cent in the first three months of the year, bringing the 12-month return to 24.4 per cent, up from the 21.2 per cent annual return noted at the end of 2005.

Oppenheim Investment Managers were the best performers in the quarter with a return of 6.4 per cent. Next came Eagle Stare (6 per cent), both well ahead of laggards Canada Life/Setanta (4.4 per cent) and Bank of Ireland Asset Managers (BIAM) with 4.6 per cent.

Oppenheim's performance was boosted by a strong March return - 1.8 per cent against an industry average of 1.2 per cent - rivalled only by AIB investment Managers (AIBIM), which has struggled recently, on 1.7 per cent. Acorn Life and BIAM grew funds by half a percentage point or less last month.

BIAM also propped up the table over the one and three-year periods. In the year to March, Standard Life's 27.4 per cent return topped its peers, while over three years, Irish Life's average annual gain of 20.8 per cent was ahead of the average of 18.6 per cent annually.

Eagle Star performed consistently well over the short and medium terms, and its 6.4 per cent per annum growth over the last five years was significantly better than the 5.1 per cent industry average and the 3.5 per cent annual return by AIBIM.

Oppenheim continues to rank best in the 10-year timeframe considered a better measure for pension funds. Its 12.7 per cent return each year again left AIBIM's 8.9 per cent trailing.

On the liability side, rising bond yields have given schemes hope of narrowing funding gaps.