Pension reserve fund adds 4% in the first half

The National Pension Reserve Fund (NPRF) has built on last year's gains by adding a further 4 per cent to its value in the first half of this year.

It emerged yesterday that the fund, which was launched in 2002 to aid the Government in meeting long-term pension costs, is currently worth some €10.5 billion. It has investments in about 1,200 companies and retains about €1 billion of its assets in cash.

Dr Michael Somers, chief executive of the National Treasury Management Agency - the body that oversees the NPRF - said the fund's managers had looked at investing in Irish infrastructural projects but had failed to find anything with sufficient appeal.

The Minister for Finance, Mr McCreevy, who was attending the launch of the NTMA's annual report for 2003, expressed optimism that this situation would change as the roll-out of public-private partnerships (PPPs) is stepped up over the next few years. "Government departments are going to have to go out there and do PPPs. If they don't, they're going to lose," Mr McCreevy said.

Both Dr Somers and the Minister went on to acknowledge the concerns of some commentators who believe the NPRF should have a strictly ethical investment policy. This would see it avoid holdings in sectors such as tobacco and military suppliers.

Dr Somers said the fund was discussing the matter with a similar scheme in another jurisdiction to see how it could be addressed in a practical fashion.

Mr McCreevy went on to discuss the end-date of the Government-sponsored special savings incentive account (SSIA) scheme, rejecting the notion that participants in the scheme should be further incentivised to save after it closes.

He said there were already "plenty of incentives" in existence, pointing in particular to the 42 per cent tax relief available on pension contributions.

The NTMA annual report showed the Republic continued to have the second-lowest debt to GDP ratio of the pre-expansion EU last year. This ratio currently stands at 32 per cent.

It also revealed that the State Claims Agency, which falls under the NTMA's authority, is managing more than 2,000 personal injury claims, including 600 claims for alleged clinical negligence.

Dr Somers said the agency, which manages claims against any Government body, had logged a decline in claims received in the past few months.