IRELAND - The Irish government has appointed former central bank governor Maurice O'Connell to review the €18.7bn National Pension Reserve Fund (NPRF) following the recent market volatility.

Finance minister Brian Lenihan revealed in his recent budget speech that he intended to commission a review of the fund "in the context of recent economic and fiscal developments".

O'Connell, who headed Ireland's Central Bank from 1994 until he retired in 2002, is expected to report by the end of the year.

Lenihan said any recommendations from the review that require a change in legislation "will be brought forward in due course".

O'Connell's appointment follows the NPRF's third-quarter results in which it revealed large equity losses had produced a three-month return of -6%, while the overall return for 2008 was -17.3%. (See earlier IPE article: NPRF falls 17% year-to-date)

Meanwhile, the Dáil, the Irish parliament, is also seeking to introduce legislation that would prevent the NPRF and any other state body from investing in cluster munitions and anti-personnel landmines. (See earlier IPE article: Irish Bill to stop pensions investment in cluster bombs)

The Cluster Munitions and Anti-Personnel Mines Bill 2008 has now been referred to the committee stage of the process, and although the legislation does not specifically tackle the issue of NPRF investments the government claimed this would be rectified through amendments at Committee once a date has been set.

Micheál Martin, minister for foreign affairs, said the government intends to introduce legislation that will make it "expressly clear that the investment of public moneys, including by the NPRF, in any company that produces cluster munitions or anti-personnel mines is prohibited".

However he added: "This is a complex undertaking, involving consultations among numerous actors, and it was unfortunately not possible to complete work on it in time for its inclusion in the Bill as published. We hope to be able to bring this forward as soon as possible to allow for consideration on committee stage."

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