National Pensions Reserve Fund

national pensions reserve fund

Ireland US$ 19.4 Billion
Established: 2001
Transparency Rating: 10
View Sovereign Fund Transaction Data
View Asset Allocation		 Origin: Non-Commodity
Firm Investment Style: Mixed
Entity Structure: Fund
Population Est.: 4.78 million – 2013
Wealth Per Capita Est.: $4,062
Summary
The National Pensions Reserve Fund (NPRF) was established by a law in April 2001 to partly fund future pension liabilities. Its objective is to meet as much as possible of the costs of social welfare and public service pensions from 2025 onwards when these costs are projected to increase dramatically due to the aging of the population. The government of Ireland will set aside 1% of GNP each year to fund this vehicle.

Background
Under the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009, the Commission is also required to make investments in credit institutions, as directed by the Minister for Finance where, having consulted the Governor of the Central Bank and the Financial Regulator, he decides such direction as is required, in the public interest, for either or both of the following purposes:

    To remedy a serious disturbance in the economy of the State;

    To prevent potential serious damage to the financial system in the State and ensure the continued stability of the system.

The Credit Institutions (Stabilisation) Act 2010 also provides for Ministerial directions for the Fund to invest in Irish Government securities or for payments to the Exchequer 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 NPRF Commission.

 Strategy & Objectives
There are two portfolios: the discretionary portfolio (the investment of which remains the Commission’s responsibility) and the directed investments (where the investments are made at the direction of the Minister for Finance).

Discretionary Portfolio
The fund invests mostly in bonds and equities, utilizing external managers. The fund also invests in private equity and in real estate.

Governance
The National Pensions Reserve Fund Commission comprises seven members appointed by the Minister for Finance. The Commission performs its functions through the National Treasury Management Agency, which is the Manager of the Fund.

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