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IPE special report May 2018

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Irish schemes see 'slight uplift' as domestic equity returns 4%

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  • Irish schemes see 'slight uplift' as domestic equity returns 4%

IRELAND – Funding within Ireland’s defined benefit (DB) schemes will have seen a “slight uplift” during May thanks to an increase in asset value aided by growth in Irish equity.

While the consultancy noted that equity markets had mostly seen a “quiet” month – perhaps with the exception of the downturn witnessed in Japan – it highlighted the domestic ISEQ had returned 4.1% over the month and nearly 20% since the beginning of the year.

Darragh Gavin, investment consultant at Aon Hewitt, said: “Irish defined benefit pension schemes will have seen a slight uplift in their funding levels in May as their assets continued to rise.”

However, he warned that the continually low bond yields in euro-zone countries were still keeping liabilities within Irish DB schemes high.

Overall, the consultancy’s index of traditionally managed pension funds rose 1% over the month, contributing to a 9.7% return since the start of the year.

The estimate was roughly in line with data collected by Rubicon Consulting for the managed fund market, which estimated an average return of 1.6% across the 10 monitored providers.

Merrion Investment Managers saw the strongest returns, outperforming the average and announcing results of 2.1% in May – but nonetheless falling slightly below the year-to-date average of 9.9%.

Canada Life saw the strongest year-to-date results of 13.3%, also outperforming the May average by 0.3 percentage points, while Irish Life Investment Managers returned 2% last month and, at 10.5%, slightly above the average 2013 performance.

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