mast image

Special Report

Impact investing

Sections

‘Untouchable’

The National Pensions Reserve Fund in Ireland was purposely structured to enable it to match the returns achieved by private pension funds, the fund’s main architect, finance minister Charlie McCreevy told the recent UK and Irish Pensions & Investment Summit in Dublin.
“The fund’s investment strategy and management was conducted by commissioners who are independent of government. Secondly, the investment strategy is based on a commercial investment mandate with the objective of securing the optimal return over the long term subject to prudent risk management.”
To ensure the fund cannot be used by future governments for any other purpose besides meeting of pensions costs, there was a statutory prohibition on draw downs prior to 2025, he pointed out. Then there ministerial rules in force to determine the these payments.
“There has been some political debate on this point in the run up to the next general election,” said McCreevy, referring to views expressed by opposition parties to using the fund’s assets before then. “The longer the fund was set up, it would be a brave government which would go and touch the money in the fund.” This was now over E8bn.
On the question of non commercial or social objectives for the fund, he said: “I went away from all that.” The aim was to operate like a private fund and to optimise returns.
Referring to the changes he made to retirement annuity contracts, so that the assets would not have to be taken as an annuity, but could be drawn down. He said this change had been based on his own experience as an accountant in private practice dealing with self employed people who were well able to look after their own money. “They should be free to make own decisions about their own money.”
The minister referred to recent tax changes relating to occupational pensions plan contributions, which increased the tax relief limits from 15% to 30% of earnings depending on age. This included additional voluntary contributions.
Also, he increased the maximum pension payable to a spouse or dependent on death of a scheme member can be up to 100% of pension, instead of two thirds.
For the new Personal Retirement Savings Accounts, up to 30% of income could be contributed tax free for those over the age of 40, he pointed out.
He said these and the other changes introduced would “assist greatly towards the aim of ensuring that all Irish citizens have an adequate income on retirement”.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

Begin Your Search Here
<