IRELAND - The Republic of Ireland's National Pensions Reserve Board has denied government contributions to the fund will fall to less than 1% of GNP.

A spokeswoman for the National Pensions Reserve Fund (NPRF) said there had been no change to the government's contribution level and that the Exchequer's annual contribution had been pre-funded to 2012.

The NPRF commission's annual report and financial statements for 2009 said the Exchequer would contribute €3bn to the fund toward recapitalising the Bank of Ireland and Allied Irish Bank, "frontloading the Exchequer contribution of 1% GNP for 2009 and 2010".

However, since then, the NPRF commission has underwritten a €5.4bn equity capital raising by Allied Irish Banks, and through the scheme, the Irish government will buy up all the shares.

The NRPF may buy as much as €3.7bn of the new shares and can convert €1.7bn of preference shares held since 2009.

The report also says the Financial Measures (Miscellaneous Provisions) Act 2009 provides for the transfer of assets of 16 universities and non-commercial state bodies' pension funds to the NPRF, and that these assets could be credited against the annual Exchequer contribution.

This would mean that, in future, the pension liabilities of these bodies will be met on a pay-as-you-go basis.

The transfer of assets took place in three stages: at the end of 2009 from 10 schemes (€993m), three university schemes on 31 March (€1bn) and a transfer of the three final schemes on 30 June worth €50m.  

The NPRF was established in April 2001 to meet as much of Ireland's social welfare and public service pensions as possible from 2025 onward, when costs are projected to increase dramatically due to the country's ageing population.