The Central Bank of Ireland is today launching a new quarterly statistical series on the Irish pension fund sector. The collection was introduced in 2019 to increase the availability of data on pension fund financial activities, facilitating a more comprehensive analysis of a key economic sector. The collection is undertaken on a harmonised basis across all Euro area countries under an ECB Statistical Regulation. This new data provides information on the assets and liabilities of all Irish resident pension funds. For additional information on the underlying data, please see the explanatory notes below. The Central Bank will release additional data on the sector in the coming months.
At end-Q2 2020, the assets of the Irish pension fund sector were €118 billion, a notable size when compared against total assets of €395 billion held by the Irish household sector (Quarterly Financial Accounts, Q1 2020).
- The Irish pension fund sector was impacted by the financial market turmoil due to the onset of the COVID-19 pandemic, with the value of assets falling by €7.9bn (6.5 per cent) in the first quarter of 2020. The asset value partially recovered by end-June, to reach a value of €118 billion, down 2.1% since end-2019.
- Irish pension funds’ liabilities were greater than assets across all four quarters. At end-Q2 2020, liabilities held a total value of €123 billion, resulting in a deficit of €5 billion.
- The largest financial asset on the balance sheet of the Irish pension funds sector is pension fund reserves. These predominantly consist of unit-linked insurance contracts – investment products sold by insurance companies that are typically invested in a range of instruments, including debt securities and equities. The total value of pension fund reserves at the end of Q2 2020 was €46 billion, equating to 39 per cent of total assets.
- The second largest share consists of investment fund shares, with a total value at end-Q2 2020 of €43 billion.
- Pension entitlements to members account for 99 per cent of the liabilities of Irish pension funds.
- Pension entitlements to members of defined benefit (DB) pension funds have a value of €80 billion, accounting for two thirds of the total. The remaining €42 billion of pension entitlements are to members of defined contribution (DC) pension funds.