Irish pension funds grew by 16.6 per cent last year, after solid returns in the final quarter.

The average group-managed pension fund delivered gains of 5 per cent in the fourth quarter, ending on a quiet note in December when the average fund was 0.6 per cent better off.

The period underpinned a strong year for the sector, with growth recorded in 10 of the 12 months, according to Rubicon Investment Consulting.

The positive return has boosted returns over the longer term, with the average fund reporting gains of 8.8 per cent per annum for the past three years, or 11.8 per cent annually over five years, well ahead of inflation in the same period.

Average annual returns now run to 5.3 per cent. With inflation running at 1.6 per cent per annum in that time, all major funds have delivered real returns.

At 7 per cent a year since 2004, Standard Life Investments has proven the strongest performer in the Irish market over the past decade. KBC, with an annual average return of 4 per cent, was the poorest.

Standard Life was also the best performer in December, with a gain of 1.4 per cent in the month against an average of 0.6 per cent and just 0.1 per cent at New Ireland.

In 2013 as a whole, Standard Life’s 19.6 per cent growth was the best return, with the 14.7 per cent at KBC propping up the table.