PRIVATE-sector pension funds have continued to recover from the pandemic-induced shock that hit financial markets at the start of last year.
The value of the assets backing retirement funds rose by 5pc in the April to September period last year.
However, asset values still remain below pre-pandemic levels, according to new data from the Central Bank.
Total assets of the Irish pension fund sector were €118.3bn in the three months up to September, up slightly on the previous quarter.
This was due to increases in pension fund reserves, which primarily consist of unit-linked insurance products, and investment fund shares.
Pension entitlements, or what will have to be paid out when members of schemes give up work, worked out at €80.5bn for defined benefit pension funds.
The entitlements for defined contribution pension funds was €42.5bn at the end of the third quarter last year.
Jerry Moriarty of the Irish Association of Pension Funds said it was good to see an increase in assets.
He said that pensions were long-term investments which means people should not dwell on how investments perform from one quarter to another, unless they are very close to retirement.
The figures do not take account of pay-as-you-go public sector pensions where there is no fund in place to pay the retirement incomes.
Recent figures from the Central Statistics Office show that public sector pensions make up a quarter of all pension money owed to households in the State.
Other CSO research indicates that close to four out of 10 workers have no pension in place for when they retire, and will be relying on the State Pension.
Despite this, the indications are that the planned auto-enrolment pension scheme has again been delayed.
The overwhelming majority of those with no occupational pension coverage are in the private sector.
Pension coverage is lowest among younger workers, according to the CSO.
Among those that have a private-sector pension fund in their name, the Central Bank found that 65p of the private-sector pension fund entitlement are represented by defined benefit schemes.
With a defined benefit pension, the risk is borne by the sponsor company. These schemes promise a set level of pension based on years worked and final salary.
Any shortfall in meeting this commitment has to be met with higher contributions from the employer, the employee, or both, or a reduction in the promised pension.
The expense of these schemes has seen their number fall by half in the last decade.
With a defined contribution scheme, the risk is borne by the pension holder.
The pay-out at retirement depends on what is paid into the scheme and the return from the investments.
The moves by employers to close down defined benefit pensions and replace them with defined contribution schemes means households are now more exposed to financial market movements.
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