Latest News & Publications
||Third Quarter 2013 Performance & Portfolio Update. (Published 1 November, 2013)|
||Annual Report 2012. (Published 18 July, 2013)|
||Second Quarter 2013 Performance & Portfolio Update. (Published 18 July, 2013)|
||BlueBay Asset Management LLP and National Pensions Reserve Fund Announce Launch of New Lending Vehicle for Irish SMEs. (Published 10 July, 2013)|
|NTMA (Amendment) Bill: NewERA and €6.4bn Strategic Investment Fund. (Published 13 June 2013)|
||NPRF First Quarter 2013 Performance Portfolio Update. (Published 26 April, 2013)|
||NPRF makes fifth investment in support of Innovation Fund Ireland. (Published 08 March, 2013)|
||NTMA Results and Business Review 2012. (Published 09 January, 2013)|
||National Pensions Reserve Fund announces new funds - €850m available for investment in Irish SME sector. (Published 09 January, 2013)|
||Third Quarter 2012 Performance and Portfolio Update. (Published 12 November, 2012)|
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. The Fund is controlled and managed by the National Pensions Reserve Fund Commission.
The Commission performs its functions through the National Treasury Management Agency, which is the Manager of the Fund.
Under the NPRF Act, the Commission is required to invest the assets of the Fund so as to secure the optimal total financial return, having regard to the purpose of the Fund and the requirements on the Fund to make payments to the Exchequer from 2025 onwards, provided the level of risk to the moneys held or invested is acceptable to the Commission. Given the long-term horizon of the Fund specified in the legislation, the Commission developed a long-term investment strategy which is reflected in its strategic asset allocation.
In 2009 the Minister for Finance decided to utilise part of the assets of the Fund to assist in dealing with the financial crisis facing Ireland. The Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act 2009 (the “2009 Act”) amended the NPRF Act, to enable the NPRF to be used for the purposes of bank recapitalisation. It empowers the Minister for Finance to direct the Commission to invest in specified securities of credit institutions where, having consulted the Governor of the Central Bank and the Financial Regulator, he decides such a direction is necessary, 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.
Given the directed nature of the banking investments and the fact that the Commission’s statutory investment policy does not apply to them, for management purposes, the Commission decided in early 2009 to separate the NPRF into two parts for management purposes – 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).
In late November 2010, the Government announced that the Fund would provide up to €10 billion of the State’s €17.5 billion contribution to the €85 billion EU/IMF Programme of Financial Support for Ireland (“the Programme”). The Credit Institutions Stabilisation Act 2010 (the “CISA Act”), enacted in December 2010, significantly amended the legislation governing the Fund.
The CISA Act gave the Minister for Finance significant powers in relation to the Fund including the power to:
- Reduce or suspend the annual Exchequer contribution to the NPRF in any of the years 2012 and 2013.
- Direct the Commission to invest in Irish Government securities.
- Direct the Commission to make payments directly to the Exchequer in the years 2011, 2012 or 2013, where it appears to him to be desirable to do so in the interests of funding capital expenditure by the Exchequer.
A standing instruction was issued by the Minister for Finance on 21 December 2012 exercising the powers under section 18(2B) of the National Pensions Reserve Fund Act 2000 (inserted by section 76 of the CISA Act) to order that:
- no sum shall be paid from the Exchequer into the National Pensions Reserve Fund in the year 2012, and
- no sum shall be paid from the Exchequer into the National Pensions Reserve Fund in the year 2013.
Ireland Strategic Investment Fund
In September 2011, the Government announced its intention to establish the Strategic Investment Fund, which had formed part of the Programme for Government published by the Government in March 2011. The Minister for Public Expenditure and Reform stated in the announcement that:
“The Strategic Investment Fund … will, following appropriate legislative changes regarding the NPRF’s investment policy, channel resources from the NPRF towards productive investment in the Irish economy. As well as money from the NPRF, the Strategic Investment Fund will seek matching commercial investment from private investors, and target investments in areas of strategic significance to the future of the Irish economy.”
The Commission has been engaged in ongoing dialogue with the Minister for Finance and his officials in relation to the proposed legislative amendment. On 13 June 2013, the Government announced its legislative proposals to establish the Ireland Strategic Investment Fund and that the legislation is expected to be enacted later in 2013.