The two most talked about events of the Irish pension scene occurred within weeks of each other. The first is the tendering process for the E6bn worth of mandates for the National Pension Reserve Fund (see page 12) which was officially commenced this summer and is to be completed before the end of the year.Then the question raised by this exercise, which still has the industry guessing is the extent to which domestic managers will get a look in, will have been answered.
With such a strong contingent of international managers participating, it would be a high accolade for the Irish investment industry to pull off at least some of the mandates. An indication of the Industry’s muscle came with figures from the Irish Association of Investment Management showing that the 13 major groups active in the domestic market controlled some Ir£48bn (e61bn) in pensions assets, including those held in insurance policies and unit trusts. Segregated accounts hold Ir£25bn while overall assets managed by the industry, including those for overseas clients comes to Ir£75bn.
The second major event of the summer was the publication of the long awaited Pensions Bill. Its most prominent provision is the introduction of the personal retirement savings accounts (PRSAs), which are now likely to come on the market next year.
These individual tax advantaged accounts will replace a number of existing pensions vehicles and are designed to encourage pension provision among those not covered by occupational schemes. Employers will have to provide access to these vehicles where there is no pension scheme.
The regulator, the Pensions Board will be monitoring closely the development of PRSAs and the extent to which they extend pensions coverage in Ireland. If this initiative does not succeed, the board has said it will consider pressing for compulsory pension provision. In its recent annual report, it was able to point to an increase of coverage among occupational pension schemes membership of around 10 in 2000, while number of schemes jumped 19%.
On the international stage, the Irish distinguished themselves by being the first country to have their local investment performance standards recognised as a country version of GIPS – the global investment performance standards.
The country was also ranked tops in terms of pension reform in Europe according to a study by Merrill Lynch in London.