Frances Fitzgerald
Question:71 Ms Fitzgerald asked the Minister for Finance the proposals, if any, he has to modify the role of the NTMA; and if he will make a statement on the matter. [22517/99]
Written Answers. - National Treasury Management Agency.
The National Treasury Management Agency was established under the National Treasury Management Agency Act, 1990, to borrow money for the Exchequer and to manage the national debt. No change in this role is envisaged.
I have considered proposals which would entail assignment to the NTMA of new functions in areas in which the agency's experience and expertise can be used to good effect. Last year, responsibility was assigned to the agency for the management of part of the FEOGA related debt and the transfer of the remaining FEOGA debt to the agency will be completed in December of this year. Furthermore, it is envisaged that, next year, the agency will assume the debt of Nitrigin Eireann Teoranta and manage it as part of its debt portfolio.
In July of this year proposals were announced which will substantially extend the role of the NTMA by providing for the establishment of a State claims agency and a central treasury service enabling the NTMA to provide a fund management service.
The State claims the agency will enable the NTMA to handle certain common law compensation claims against the State and to provide advice on risk management. The main benefits expected from the setting up of the agency are savings in settlement costs, legal charges and, through its risk advice role, a reduction in the incidence of claims.
The central treasury service will enable the agency to offer advisory and cash management services, including deposit, overdraft and loan facilities to health boards, vocational education committees, local authorities and other designated public sector bodies. The proposals also envisage allowing the NTMA to provide, where such a service is required, a formal investment management role.
In this regard I would mention the Government's decision, announced some months ago, to establish future pension liability reserve funds, financed initially by part of proceeds of the Telecom IPO and an amount equivalent to 1 per cent of GNP annually. Pending the completion of legislation establishing these funds, the NTMA is currently managing on behalf of the Exchequer the short-term investment of these funds. The arrangements for the longer-term investment and management of these funds are under active discussion at present. I have, however, already stated in public that I see considerable advantages in the NTMA having a significant role to play in the ongoing management of these reserve funds. The necessary legislation to enable the NTMA to carry out new functions is being drafted at present and I would hope that it will be possible to have it published by early next year.
I will shortly introduce a Bill in the House to provide a temporary holding fund for Exchequer moneys allocated in 1999 for pension funding, pending the enactment of detailed legislation establishing the funds themselves. It is envisaged that the NTMA will manage the temporary holding fund; the agency is already managing the moneys which will be transferred to the fund as part of its general management of the Exchequer. I will seek to have this Bill passed before the year end.