PENSION FUNDS continued to lose significant value last month, with the average Irish group managed fund shedding a further 5.7 per cent of its value.

Ongoing volatility in stock markets and the drip feed of negative economic data continued to adversely affect fund performance in February, the sixth successive month of losses for pension investors.

In the first two months of 2009, Irish pension funds have lost, on average, 7.5 per cent. Within the group, Irish Life has performed worst, nursing losses of 9.1 per cent already this year.

Standard Life, the best performer in relative terms so far this year, is down 5.5 per cent.

The longer-term picture provides little comfort, with the average fund worth more than one-third less than in February 2008. Over the past three years, the average fund has weakened by 14 per cent each year.

The latest figures mean that not a single Irish group pension fund manager is reporting gains for a period going back to February 2004 – with losses in the past two years easily outweighing gains in 2004, 2005 and 2006.

Fiona Daly, managing director of Rubicon Investment Consulting, noted that only one pension fund manager – Merrion Investment Managers (formerly Oppenheim) had recorded gains over the 10-year period. But allowing for inflation, which averaged 3.5 per cent over the past decade, even Merrion’s fund was under water.

“The long-term return figures are shockingly poor,” said Evelyn Reidy, director of investment consulting at Hewitt Associates.

“Rolling 10-year returns have historically averaged over 5 per cent [per annum]. However, they have been falling since August 2008 and are now in negative territory.”

Hewitt’s data, which includes performance figures for the past 15 years, does show that the pension funds are still recording an average annual gain of 4.6 per cent per annum over the 15-year period – about 1.4 percentage points ahead of inflation.