Caledonian Life, Standard Life and Eagle Star were respectively the top performers in the pension funds market over the 20, 15 and 10 years to January 2001, producing the highest maturity values for investors according to the 10th annual Irish Times Personal Pension Survey. With-profit funds produced higher maturity values than unit-linked funds over 15 and 20 years, while unit-linked funds fared better over 10 years, the survey shows.

Caledonian Life turned an annual investment of £2,000 (€2,541) over 20 years (total £40,000) in its with-profit fund into £265,892 at maturity. The best performer over 20 years in the unit-linked funds market, New Ireland, turned a similar annual investment into £233,496 at maturity.

Over 15 years, the top with-profit fund, Standard Life, produced a maturity value of £110,866. The top unit-linked fund, New Ireland, produced a maturity value of £93,178 over the same period. Over 10 years, the top unit-linked fund, Eagle Star, produced a maturity value of £51,573, while the top with-profit fund, Standard Life, produced a value for investors of £44,707.

New Ireland retained its position as the top performer in unit-linked pension funds over the 15- and 20-year periods to 2001, while Eagle Star remained at the top over the 10-year period, the survey shows. Over 10- and 15-year periods, Standard Life was the top performer in with-profit pension funds, with Caledonian Life producing the best performance over 20 years.

Eagle Star turned an investment of £2,000 per annum over 10 years, a total of £20,000, into a fund of £51,573 at the end of the period - giving a net return or yield of 16.72 per cent per annum.

Over the 15- and 20-year time spans, New Ireland outperformed its competitors in the unit-linked market with compound annual returns after all charges of 13.22 per cent and 14.93 per cent respectively. At the end of the 15 years to January 1st 2001, an annual sum of £2,000 (total £30,000) invested with New Ireland would have produced a fund of £93,178.

The worst performers in the unit-linked market were Standard Life over the 10-year period, Hibernian Life over 15 years and Irish Life over the 20-year time span. Standard Life displaced last year's worst performer over 10 years, Lifetime. Its net return of 11.59 per cent compared with the 16.72 per cent return from the top performer. The £38,401 maturity value of the unit-linked fund at Standard Life compared with the best return of £51,573 over the period.

Hibernian Life, the merged CGU and Norwich Union, retained its position as the worst performer in the unit-linked market over 15 years, producing an annual net return of 11.24 per cent. The gap between the best and worst performance over 15 years was a narrower 2 percentage points - 13.22 per cent compared with 11.24 per cent. But that gap meant a maturity value of £78,058 at Hibernian, compared with £93,178 from top-performer New Ireland. Over 20 years, Irish Life produced an annual net return of 13.05 per cent and a fund at maturity of £184,151, compared with the best market return of 14.92 per cent from New Ireland and a fund of £233,496.

In the with-profit pensions market, Standard Life displaced Caledonian Life (formerly Guardian Life) as the top performer over 10 and 15 years, while Caledonian Life retained its top placing over 20 years. Standard Life produced net annual returns of 14.24 per cent over 10 years and 15.14 per cent over 15 years, while over 20 years, Caledonian Life produced a net annual return of 15.95 per cent.

The worst performers in the with-profit category were Royal Liver over 10 years with a net annual return of 11.02 per cent, and Hibernian Life over 15 and 20 years, according to the survey. Over 15 years, Hibernian produced a net annual return of 12.88 per cent compared with the top return of 15.14 per cent. Over 20 years, Hibernian's annual return of 13.96 per cent compared with the top return of 15.95 per cent.

Comparing the performance of unit-linked and with-profit funds shows that unit-linked funds performed better over 10 years while with-profit funds were better performers over 15 and 20 years.

Over 10 years, the best unit-linked fund produced a better lump sum at maturity than the best with-profit fund - £51,575 against £44,707. And the worst unit-linked fund was better than the worst with-profit fund - £38,401 against £37,160.

But over 15 and 20 years, with-profit funds produced better returns. Over 15 years, the best with-profit maturity value was £110,866 compared with £93,178 for the best unit-linked fund. The worst with-profit maturity value was £90,400 against £78,058 for the worst unit-linked fund - both Hibernian Life funds. Over 20 years, the best with-profit fund produced a maturity value of £265,892 against £233,496 by the best unit-linked fund. The worst with-profit fund produced a maturity value of £206,602 against £184,151 by the worst unit-linked fund.

The Personal Pension Survey is the only survey in the Irish market based on pension fund valuations at maturity after life company charges are deducted. It is produced for The Irish Times by independent financial adviser Financial Development and Marketing (FDM). The survey compares the values at age 60 years of the pension funds of male contributors built up over periods of 10, 15 and 20 years, and invested with different companies. Typical pension investments are in mixed funds, either unit-linked managed funds or with-profit funds.

Life companies are asked to supply maturity values once they have been in the personal pensions market for 10 years. The companies in the market and their results in terms of net yields and maturity values over 10, 15 and 20 years are shown in the tables. It is important to note that the survey assesses past performance, which, while useful in examining the relative value, should not be used in isolation to pick investment strategies and products.

But what do the different annual percentage yields or returns really mean for a pension fund investor? How does a lower return figure impact on the maturity value of their pension fund?

The unit-linked market: The survey shows that over the 10 years to January 1st, 2001, Eagle Star turned a total investment of £20,000 into a fund of £51,573. Over the same period, the £2,000 per annum invested with Standard Life produced a fund of £38,401, a difference of £13,172. Therefore, an investor with Eagle Star would have £13,172 more in his fund at the end of 10 years than an investor with Standard Life.

Of the 10 companies in the market for the 10-year period, Acorn came second to Eagle Star, with a net annual return of 15.23 per cent and a fund maturity value of £47,322. Canada Life, which participated in the survey for the first time since 1996, was in third place - with a return of 13.56 per cent and a fund value of £42,995.

Next in the rankings was Irish Life, with a return of 13.12 per cent and a fund value of £41,910. Friends First came in at fifth place followed by New Ireland, Lifetime, Hibernian Life, Scottish Provident and Standard Life.

Over the 15-year period, the £30,000 (£2,000 per year for 15 years) invested with New Ireland produced a fund of £93,178, while the same amount invested with Hibernian produced a fund of only £78,058, a difference of £15,120 in the pension fund of the investor after 15 years.

Of the six companies in the unit-linked market over the 15-year period, Friends First came second, with an annual net return of 12.22 per cent and a fund maturity value of £85,176.

Irish Life was third, producing an annual net return of 12.13 per cent and a fund maturity value of £84,460. Canada Life came fourth followed by Standard Life, with Hibernian at the bottom of the table.

Over the 20-year period, there were only three companies in the market - New Ireland, Canada Life and Irish Life.

An investment of £40,000 (£2,000 per annum for 20 years) with New Ireland would have produced a fund of £233,496, while the same investment with Irish Life would have produced a fund of £184,151. The difference between best and worst meant a difference of £49,345 in the funds of the investor.

Overall in the unit-linked market, New Ireland, a wholly owned subsidiary of Bank of Ireland, produced a strong performance. In addition to being top in the 20-year category, it has now held its first position over the 15-year time span for eight consecutive years. But the company failed to regain the top place in the 10-year category - last year it fell to sixth place from first place in 1999.

Eagle Star, owned by Zurich Financial Services and formerly known as Shield Life, outperformed again in the 10-year category for the second year, beating the worst performer this year by 34 per cent. Eagle only joined the survey last year when its unit-linked pension fund was 10 years old.

Acorn, also on its second outing, continued its strong performance, retaining its second position over 10 years. Its assets are managed by HBSC.

Hibernian Life dropped from fourth to eighth place in the 10-year category and remained in last position for the 15-year time span.

Over the 10-year period, the best performer, Eagle Star, is a commission-paying broker life office, while second-placed Acorn uses a direct sales force and the third company, Canada Life, uses both channels.

With-profit market: In the with-profit market, Standard Life's top net annual return of 14.24 per cent over 10 years produced a fund maturity value of £44,707. The next best performer was Caledonian Life, with a return of 13.96 per cent and a maturity value of £43,982. The four remaining funds were close together, with maturity values from £37,916 at Scottish Provident to £37,160 at the worst performer, Royal Liver. Net annual returns from these four companies ranged from 11.37 per cent to 11.02 per cent.

The top three rankings remained the same for the 15-year period. Standard Life's 15.14 per cent annual return produced a fund at maturity of £110,866. Caledonian followed with a return of 14.21 per cent and a fund of £101,854, while Scottish Provident's 13.28 per cent return resulted in a fund of £93,711 at maturity. Of the five companies in this category, Friends First was fourth with an annual return of 13.01 per cent and a fund of £91,446, while Hibernian Life was last with a return of 12.88 per cent and a fund of £90,400.

In the 20-year category, Caledonian Life was the best performer. Its 15.95 per cent net annual return produced a £265,892 fund. At the bottom of the table was Hibernian Life with a 13.96 per cent return and a fund at maturity of £206,602.

Standard Life came second, with a return of 15.88 per cent and a fund of £263,632, followed by Friends First with a 14.79 per cent return and a fund of £229,404 and Scottish Provident with a return of 14.58 per cent and a fund of £223,379.

Standard Life produced a strong performance, coming first in the 10- and 15-year categories. It has improved from second position in 2000 and fifth place in 1999 in the 10-year category, and from second and fourth places respectively in the 15-year category.

Hibernian Life fell to fourth place in 2001 from third place in 2000 and first in 1999 over 10 years, and to last (fifth) place in the 15-year category from third in 2000. It retained its last place over 20 years in the with-profit category.

Copies of the Irish Times Personal Pension Survey 2001 are available from FDM at Summerhill House, The Curragh, Co. Kildare. Tel: 045 442051; e-mail: ehobbs@indigo.ie. The report costs £60 for a printed copy and £30 for an e-mail copy. FDM is a registered business title for the financial and management consultancy of Mr Eddie Hobbs, who is authorised by the Central Bank under Section 10 of the Investment Intermediaries Act.