Dáil Éireann debate -
Thursday, 28 Oct 1993

Vol. 435 No. 2

Written Answers. - Pension Funds Investment.

Avril Doyle

Question:

52 Mrs. Doyle asked the Minister for Finance if he will make a statement on his budget requirement that private pension funds invest £100 million in venture capital projects and his views on whether this is double taxation and on whether it will erode the investment base of these funds and prevent the trustees carrying out their legal responsibility to invest contributions to ensure pension levels for the future.

Minister for Finance (Mr. B. Ahern)

During my Second Stage speech on the Finance Bill I indicated that the Government proposed that pension funds should work towards a target investment of £100 million in venture and development capital projects over and above their existing level of investments in unquoted companies, to be phased in over a five year period. As the Deputy will be aware from my replies to earlier questions on this matter, the Irish Association of Pension Funds, following discussions with myself and my officials, endorsed the principle of this initiative.

The Deputy will also be aware that, as a result of these discussions, it was agreed that a detailed study should be carried out under the auspices of the Irish Association of Pension Funds and supported by other interested parties including my Department to assess, among other things, the opportunities for investment in this area and its suitability having regard to the prudential requirements of pension fund trustees. This study is expected to be completed shortly. The target figure of an additional investment in venture and development capital projects of £100 million will be subject to the outcome of this study and to sufficient commercially viable projects being brought forward. There is, therefore, no basis for the view that this initiative constitutes double taxation or that it will prevent pension fund trustees from carrying out their legal responsibility to invest contributions to ensure pension levels for the future.