The average Irish managed pension fund increased by 10.4 per cent in 2004 but pension liabilities grew by an even greater amount during the year resulting in a continued fall in solvency funding levels for most pension schemes
.The data is contained in the latest figures released by Mercer Investment Consulting.
The pension advisers also warned that many people do not realise that pension liabilities are valued with reference to the growth in bond markets.
The growth in long dated bonds during 2004 was 15 per cent which has out-stripped the asset returns by almost 5 per cent leading to a corresponding fall in funding levels.
"The effect of changing bond yields is often over-looked by pension fund commentators, but it will become very clear in the next few months as companies are due to show even greater pension deficits on their balance sheets at year end," said Tom Murphy, Head of Mercer Investment Consulting.
"The effect will also feed into the many funding proposals and valuations due at this time of year."
Average fund growth in the fourth quarter of 2004 was 4.8 per cent, with Eagle Star's Balanced Fund leading the way with growth of 5.6 per cent, closely followed by AIBIM's Managed Fund returning 5.4 per cent.
The underperformer over this period was Davy's Exempt Pension Managed Fund which returned 3.5 per cent.
AIBIM's Multimanager Fund (12.8 per cent) topped the table over the full year 2004, followed by Irish Life's Managed Fund (12.4 percent).
KBCAM (7.1%) and Acorn Life (9.5%) were the poorest performing funds over the year.
Looking at longer term periods, the average managed fund has returned -0.6 per cent per annum. over the five year period to the end of December, with BIAM's Managed Fund (+2.5 per cent.) and New Ireland (+2.4 per cent) the best performing funds.