A turbulent 2008 took its toll on Irish pension funds, with recorded losses of €27bn as managed funds declined by 34.8 per cent, according to Rubicon Investment Consulting.

Leading a dismal set of results was Setanta Asset Management, with a return of -29.6 per cent, and Hibernian Investment Managers was the worst performing manager with a return of -38.8 per cent.

Rubicon has attributed these losses primarily to the fact that Irish pension managed funds were substantially over-exposed to an underperforming domestic equity market, as Irish equities declined
by 65 per cent over 2008.

Approximately €4.6bn was wiped off the value of Irish pension funds due to their exposure to Irish equities alone, said Rubicon.

Defined benefit (DB) schemes must take their share of the blame, with Rubicon estimating that they will have seen an increase in liabilities of between five and ten per cent over the year, due to falling bond yields. A similar rise in the cost of buying a pension at retirement for members of defined contribution (DC) schemes has also been recorded.

Rubicon said that despite the government's recent relaxation of some of the rules under which pension schemes operate the pressure that is put on schemes and member will not be fully alleviated by these temporary measures.

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