Pensions reserve fund is €5.7bn but €1.2bn has been committed


THE NATIONAL Pensions Reserve Fund discretionary portfolio will contain €4.5 billion when €1.2 billion, legally committed to various fund investments, is factored out, Minister for Finance Michael Noonan has confirmed.

Portions of the fund, sometimes described as the State’s “rainy-day fund”, have been used to contribute to the EU-IMF bailout and to invest in the embattled banking system. Many purposes have been suggested for its contents in recent years, from job creation schemes to the funding of another State-owned bank.

Mr Noonan was responding to a parliamentary question from Labour TD Kevin Humphreys, who asked him to reveal the value of cash reserves and all other investments held by the fund.

“The total value of the National Pensions Reserve Fund discretionary portfolio at March 31st, 2012, was €5.7 billion, including cash balances of €0.9 billion,” the Minister said. “It should be noted that the fund has legally committed €1.2 billion to various fund investments, of which over €800 million has been committed to investment in Ireland.”

Mr Humphreys made a similar enquiry about the National Treasury Management Agency. Mr Noonan said he was informed by the agency that it held cash reserves and other investments on behalf of the State worth €18.6 billion on March 31st, 2012.

“These figures include cash held in the exchequer account at the Central Bank, cash held on deposit, Housing Finance Agency guaranteed notes, cash balances in the Dormant Accounts fund and other ministerial funds,” he said.

The pensions fund was established in April 2001 to meet the costs of Ireland’s social welfare and public service pensions from 2025 onwards, when these are projected to increase dramatically due to an ageing population.

The Credit Institutions (Stabilisation) Act 2010 allowed for the fund to invest in Irish government securities or to fund capital expenditure in the financial years 2011, 2012 and 2013. The implications of these developments for the fund’s operations and investment strategy are being considered by the pension fund commission, which manages the fund.