Irish investment managers expect to win important mandates as a result of the publication of new bill from the government. The new bill has set up the legal framework for the establishment of a national pensions reserve fund to partly cover the nation’s pension fund liabilities.
The Irish minister for finance, Charlie McCreevy says: “The decision to establish a national pension fund marked a significant departure in the management of the public finances and introduced new strategic long-term element in budgetary planning.”
In 1999, the government decided to put aside 1% of GNP each year and the major part of the receipts from the flotation of Eircom, to partly fund future pension liabilities. The money accumulated so far, over Ir£4bn (E5bn), will be transferred to the new fund.
The bill provides a strictly commercial investment mandate for the fund which will be given to the National Treasury Management Agency, to act as a ‘manager of managers’ for 10 years. The reactions among Irish asset managers have been positive and they expect to get a good share of the business.