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Impact Investing

IPE special report May 2018


Irish funds hit by losses of 19%

The head of the Irish Association of Pension Funds says Irish pension funds lost an average of 19% in 2002 - and that stocks remain their key assets.
“The levels of stock market fall are of concern to pension fund trustees and plan sponsors and members, faced with worries about potential pension fund deficits that could result in increased costs or the possibility of reduced benefits,” IAPF chairman John Feely said.
Feely, noting the worldwide 31.3% decline in stocks in 2002, said it was important “to recognise that last year was not all bad news”. Although Irish funds hold around two thirds of their assets in equities, they have a “spread of assets”. “This means that pension funds were not as severely hit as might be expected from the equity falls mentioned above. However, the loss, was, on average, approximately 19%.”
Feely said stocks were still “key long-term assets for pension funds”. “Pension fund investment is a long term process typically covering time horizons of up to 40 years,” he said, “but the last three years combined with market volatility have emphasised the importance of trustees reviewing their asset portfolios to make sure it is in line with their objectives.”
Feely said Irish pension fund returns over the past 10 years “have averaged 10.9% per annum”.
The IAPF has launched a new investment handbook called “The Pension Fund Investor” designed to give pension fund trustees “a broad understanding of pension fund investment issues”.

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