Irish finance minister to be given new powers over NPRF
IRELAND - The Irish government has announced plans to grant the minister for finance power over the National Pension Reserve Fund (NPRF).
The Credit Institutions (Stabilisation) Bill 2010, published this week, sets out to revise the National Pension Reserve Fund Act, which specified that assets would be managed independently from the government.
Other changes made as part of the bill will see the NPRF allowed to invest in non-listed financial institutions, which would allow for the government to delist nationalised banks.
A department of finance spokeswoman told IPE: "The minister has been given more powers, but that is to fulfill what is in the memorandum of understanding with the IMF."
The spokeswoman said further that the powers were enabling powers, with no specifics decided upon.
"These will only arise when the minister needs them and they come under the four year plan," she added, saying that in line with the Credit Institutions Bill, the powers could only be evoked until the end of 2012.
The Bill states that the minister for finance, currently Brian Lenihan, will be given powers to "give certain directions in relation" to the NPRF.
The announcement is in contrast to 2000 Act, which specified the establishment of an independent commission to control and manage the fund, as well as forbid any drawdowns before 2025.
Jerry Moriarty, director of policy at the Irish Association of Pension Funds said that while dealing with immediate and short-term issues, the long-term role of the NPRF was being forgotten.
"The reason for putting that protection in place was to ensure that the scheme maintained its original purpose of being a long-term savings [fund], but circumstances have overtaken that."
Moriarty said that circumstances changed last year, referencing the NPRF's initial acquisition of shares in Allied Irish Bank (AIB) and the Bank of Ireland as part of the country's bailout.