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The National Pensions Reserve Fund was established in April 2001 to meet as much as possible of the costs of Ireland's social welfare and public service pensions from 2025 onwards when these costs are projected to increase dramatically due to the ageing of the population. No money can be drawn down before 2025 and, from then on, drawdowns will continue until at least 2055 under rules to be made by the Minister for Finance. By spreading the Exchequer burden arising from Ireland's additional pension commitments over a lengthy period, these drawdowns will contribute to the long-term sustainability of the pension system.
The Fund is controlled and managed by the National Pensions Reserve Fund Commission. The Commission's functions include the determination and implementation of the Fund's investment strategy in accordance with its statutory investment policy. This policy requires that the Fund be invested so as to secure the optimal total financial return provided the level of risk is acceptable to the Commission.
In February 2009 the Minister for Finance announced that the Fund would finance a €7 billion bank recapitalisation programme. Investments made in financial institutions by the Fund under the programme are made under Ministerial direction and the Fund’s statutory investment policy is not applied to these investments.
The Commission performs its functions through the National Treasury Management Agency, which is the Manager of the Fund.
