Pensions gain last month after October loss

PENSIONS ADVANCED again last month after losing a little ground in October, when renewed concern for global markets rattled equities.

The average Irish group managed fund grew by 1.3 per cent last month, bringing gains for the first 11 months of 2009 to 16.5 per cent.

Eagle Star/Zurich was marginally the best performer in November, with a gain of 1.7 per cent. Irish Life Investment Managers’ 0.9 per cent return marked the other end of the range.

Figures for the year to date show a wider gap in performance than is usually the case for the 10 managers monitored by Rubicon Investment Consulting. Merrion Investment Managers (formerly Oppenheim) is reporting comfortably the strongest returns with a gain of 23.7 per cent so far in 2009. The nearest competitor, Irish Life, has advanced by 19.8 per cent in the same period.

At the other end of the spectrum, AIB Investment Managers’ gains remain in single digits at 9 per cent. Over the longer term, a substantial performance gap remains, but all funds are struggling to beat inflation.

In the five years since November 2004, Eagle Star’s 3.3 per cent return per annum is significantly ahead of the sector’s 0.7 per cent per annum average. Three fund managers, Aviva Investors (formerly Hibernian), Bank of Ireland Asset Managers and KBC Asset Managers are all in negative territory over this term.

Over the last decade, four of the 10 managers listed have lost money each year, with even the outperformer – Merrion on 2.4 per cent per annum – failing to match average annual inflation of 2.9 per cent over the same period.

Separately, a report from Attain Consulting yesterday said that pension deficits at quoted Irish firms had risen by almost 15 per cent this year to €15.4 billion.