by Louis Boulanger
A Commission recently established by the Irish Government has appointed global consulting firm William M. Mercer as the investment adviser for its National Pension Reserve Fund.
The purpose of the National Pension Reserve Fund, much like Labour's proposed New Zealand Superannuation Fund, is to build up assets which will smooth the emerging cost of government pensions from 2025 onwards.
As in many developed countries, the cost of Ireland's state-funded pensions is expected to rise significantly with the progressive ageing of the population. The Irish government has elected to put money aside in advance from budget surpluses to cover the anticipated extra cost, rather than relying on paying increasing amounts as they go from year to year.
The Fund has been established
with an initial deposit of IR£5 billion from the privatisation
of its main telecommunications operator Telecom Eireann, plus
an extra 1% of GDP in 1999 and 2000, and legislation has recently
been passed committing the Government to contributing and investing
1% of GDP to the Fund each year until 2055.
Mercer, which specialises in investment consulting as well as
retirement and other services, has advised similar clients such
as the Canada Pension Plan and the Monetary Authority of Singapore.
Louis Boulanger, Executive Director of Mercer in New Zealand, says Mercer is particularly well-suited to the task given its global background in both superannuation and investment consulting. "We are acutely aware of the importance of these funds and their potential impact on this generation and those to come," said Mr Boulanger. "Mercer's breadth of experience and dedicated global research resources, combined with innovative and inquiring analytical processes, help us to cover all possible implications and present a well-rounded viewpoint."
Louis Boulanger is chief executive of William M. Mercer Limited and leader of Mercer Investment Consulting in New Zealand. He has been a member of AIMR since 1995 and a CFA Charterholder since 1997.
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