Pension assets of universities, semi-State bodies transferred to reserve fund
THE TRANSFER of pension assets from 14 universities and semi-State bodies to the National Pension Reserve Fund (NPRF) will offset the State’s annual contribution of €1.5 billion to the fund, according to a Government Bill.
Minister for Finance Brian Lenihan can take the transfer of the assets as “satisfaction or part-satisfaction” of the State contribution to the NPRF in the current year, says the Financial Measures (Miscellaneous Provisions) 2009 Bill published last week.
The Bill also states that if the value of the funds being transferred to the NPRF is greater than the scheduled annual contributions to the fund the excess can be used against Government contributions “to be paid into that fund in any subsequent year or years”.
This will enable the Government to make a substantial saving by avoiding making contributions to the NPRF. The funds to be transferred had assets worth €1.7 billion at the end of last year and liabilities of about €3 billion.
The estimate for public spending in 2009 last January included contributions of €1.58 billion to the NPRF. The Government recapitalised Bank of Ireland and Allied Irish Banks with €7 billion from the NPRF and pre-funded future contributions to the fund over the next two years.
The pension assets of Trinity College, University College Dublin, University College Cork, NUI Galway, NUI Maynooth and the National University of Ireland are to be transferred to the NPRF.
Eight pension funds within Fás, Forfas, Bord Bia, the Arts Council, Failte Ireland and Shannon Free Airport Development Company will also be transferred to the NPRF, which was set up to fund State pension and social welfare expenditure after 2025.
The transfers will will take place in 2009 and 2010, and pensions will be met on a “pay-as-you-go” basis by the State. The Government flagged the transfer of the pension funds in April’s emergency budget, saying the initial revenue and later investment returns would be offset by future payments, but the move would have a positive effect for the Exchequer.