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Dáil Éireann díospóireacht -
Tuesday, 5 Nov 2002

Vol. 556 No. 3

Written Answers. - Social Welfare Fund.

Paul McGrath

Ceist:

287 Mr. P. McGrath asked the Minister for Finance if the annual surplus from the social welfare fund is deposited; the rate of returns on these moneys by way of interest or returns on investments; if any of these moneys are held in equities; the return on same to date; and if he will make a statement on the matter. [20110/02]

The annual surplus from the Social Insurance Fund, SIF, is deposited. The Social Welfare (Consolidation) Act, 1993, section 7(3), provides that the Minister for Finance is responsible for the management of the social insurance fund investment account. Section 28 of the National Treasury Management Agency (Amendment) Act, 2000, enabled the Minister for Finance to delegate his function in relation to the investment of the SIF to the agency and to give directions and issue guidelines to the agency, having first consulted with the Minister for Social and Family Affairs.

The investment instruments which may be held are those authorised for the purposes of the post office savings bank fund, and such other debt instruments and interest bearing accounts as are authorised for the purposes of the Trustee Authorised Investments Act, 1958, as amended, and the Trustee Authorised Investments Orders, 1967, to date. Given that the SIF has to meet the liability for short-term benefit payments, investing in volatile instruments such as equities would not be appropriate.

As of 30 October 2002, the valuation at market prices of the SIF surplus invested with the NTMA was €1.088 billion. This surplus is currently being invested by the NTMA in three portfolios in a combination of euro bank deposits, cash and Exchequer notes. The annualised return on the investment is 3.91%. The total cash return on the portfolios since 11 July 2001, when the NTMA assumed responsibility for the SIF investment, has been €58,986,537.

PRSI contributions are paid into the social insurance fund deposit account which is held in the Central Bank and attracts a variable overnight interest rate. Funds are transferred out of the deposit account as needed into the SIF current account from which all SIF liabilities are paid. The SIF deposit account amounted to €146.3 million on 30 October. The interest earned to date on the SIF deposit account in 2001 and 2002 was €6,532,523.24 and €6,809.387.88, respectively.

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