WHAT IS 'National Pensions Reserve Fund'

The National Pensions Reserve Fund (NPFR) was a public pension fund established by the Republic of Ireland. Established in 2001 under the National Pensions Reserve Fund Act, 2000, it supplemented the existing pay-as-you-go public pension system. It was controlled and managed by the National Pensions Reserve Fund Commission, by way of the National Treasury Management Authority (NTMA).

BREAKING DOWN 'National Pensions Reserve Fund'

The National Pensions Reserve Fund had a long-term investment horizon. The goal of the fund was to support the monetary needs of Ireland's social welfare and public service pensions from 2025 until at least 2055. 

The Government of Ireland made annual deposits of 1 percent of GNP into the fund. The fund’s investment mandate required it to secure the optimal total return, provided the commission deemed the level of risk acceptable. The commission implemented its investment strategy through a globally diversified portfolio that included quoted equities, bonds, property, private equity, commodities and absolute return. In 2014, the NPFR became the Ireland Strategic Investment Fund (ISIF).

The NPFR’s Conversion

The National Treasury Management Authority (Amendment) Act, 2014, which was enacted on July 28, 2014, converted the National Pensions Reserve Fund into the Ireland Strategic Investment Fund (ISIF). Once established, the NPFR’s assets became those of the ISIF. 

The decision to convert the NPFR into the ISIF dated to the fallout from the global financial crisis that began in 2008. In 2009, Ireland’s finance ministry determined that it would use some of the NPFR’s assets to help with the financial crisis, as outlined in the Investment of the National Pensions Reserve Fund and Miscellaneous Provisions Act, 2009. 

Following initial investments to stabilize Allied Irish Banks (AIB) and Bank of Ireland, which required multiple rounds of public support to weather the market volatility during the crisis, the National Pensions Reserve Fund Commission made the decision to separate the NPRF into two separate portfolios. The NPFR maintained responsibility for the Discretionary Portfolio, while the Directed Portfolio was guided by the Minister for Finance. In September 2011, the government announced the establishment of the initiative that would eventually lead to the ISIF, following necessary changes to the governing legislation. 

In December of 2014, all assets governed by Irish law transferred from the commission to the National Treasury Management Authority and became ISIF assets of the ISIF. The NTMA Act enacted in July of 2014 reduced the commission to a single member, the NTMA’s chief executive. The ISIF also includes the NPRF’s Directed Portfolio, though that remains the responsibility of the finance minister. 

  1. Pensionable Service

    Pensionable Service refers to the amount of time a worker accrues ...
  2. Pension Plan Administrator

    A pension plan administrator manages the day-to-day affairs and ...
  3. Pension Adjustment Reversal - PAR

    Pension Adjustment Reversal - PAR is an option to adjust retirement ...
  4. Actuarial Basis Of Accounting

    A method used in computing the periodic payments that a company ...
  5. Pension Shortfall

    A pension shortfall occurs when a company with a defined benefit ...
  6. Pop-Up Option

    A pop up option is a joint and survivor pension option that is ...
Related Articles
  1. Investing

    The Story Behind The Irish Meltdown

    Once a lesson in national renewal, Ireland is learning that success can be fleeting. Learn the story behind Ireland's crumbling economy.
  2. Managing Wealth

    Difference Between Pensions and Social Security

    Both pensions and Social Security provide an income stream to retirees, but they differ widely on how they're structured and funded. Learn the differences.
  3. Retirement

    7 Signs Your Pension Fund Is In Trouble

    Even if you're lucky enough to have a pension plan, you can't assume it'll pay out.
  4. Retirement

    The 5 Countries With The Best Retirement Plans

    Which 5 Countries offer the best retirement plans to their citizens? They're not all in Europe.
  5. Financial Advisor

    How Do Pension Funds Work?

    Traditional private pension funds are well regulated by the government through ERISA and the PBGC. Alternative investments are aiding portfolio returns.
  6. Retirement

    The Investing Risk Of Underfunded Pension Plans

    Determine the risk to a company's EPS and financial condition resulting from an underfunded pension plan.
  7. Retirement

    What to Do If Your Pension Is Frozen or Terminated

    Here's what needs to be considered if your employer freezes or terminates your pension.
  8. Retirement

    Can Your Pension’s Cost-of-Living Clause Be Frozen?

    Recent events in New Jersey prove that relying on a pension alone to fund your retirement is risky. Make sure you have multiple retirement income sources.
  9. Retirement

    Why Are Pension Funds Sticking with Hedge Funds?

    A marriage of necessity: pension fund managers continue to chase risky alternative investments to meet growth targets amidst falling investments.
  10. Retirement

    America's Frozen Pension Dilemma

    Unfortunately, there are several factors that have eroded the presence of pension plans in America, and workers need to be prepared to replace that expected income for their retirement years. ...
Trading Center