The big employer-sponsored pension schemes performed strongly last year with the average Irish pension fund achieving 20.2 per cent growth, according to research by Mercer actuaries and consultants.

Its survey of 200 Irish pension funds with assets worth more than £20 billion (#25.4 billion) established that Montgomery Oppenheim achieved the highest investment gains for the pension funds it manages, yielding 32 per cent growth over the 12-month period.

Friends First comes in second with its funds showing increases of 21 per cent followed by Ulster Bank Investment Managers, with growth of 20.8 per cent. The lowest returns were from Irish Life Investment Managers at 16.2 per cent.

Much of the growth was based on the strong performance of technology, media and telecom stocks, with managers with the highest exposure to these sectors outperforming their peers. Funds which were primarily exposed to the Irish equity market would have fared poorly. However, pension funds are a long-term investment and as such their relative short-term performances are not the best measure for investors.

Looking at the past five years, Mercer states that the average pension fund achieved investment returns of 20.8 per cent compared to inflation of just 2 per cent in the same period.

Over the five-year period Montgomery Oppenheim also comes out as the top performing fund managers, achieving a 22 per cent annual increase compared with an average rise of 20.8 per cent within the sector. The lowest performance over this period was again from Irish Life, at 19 per cent.