The value of Irish pension fund assets regained some ground in 2009, but is still more than 16 per cent below 2007 levels, the Irish Association of Pension Funds (IAPF) said today.
The organisation warned that pension fund investment was still in a "precarious state", and said reducing tax relief on members' contributions would cut the incentive to invest in pensions.
Assets rose 13.6 per cent in value to €72.2 billion, below an €86.6 billion peak recorded in 2007, according to the IAPF's annual investment survey.
The proportion of assets in defined benefit schemes rose for the first time since 2006, from 62 per cent to 67 per cent, most likely due to a decline in defined contributions and funding injections to cover deficits in defined benefit schemes. These schemes had 64.3 per cent of assets in equities and 4.3 per cent in cash compared to 58.7 per cent in equities in defined contribution schemes and 12.5 per cent in cash.
"This suggests that DC members, stung by losses in pension fund values, remain reluctant to invest in equities," said the IAPF's director of policy Jerry Moriarty.
"The downside of this is that if equity markets continue to recover in 2010 as they did last year, they will lose the benefit of this upturn."
