The majority of Irish pension funds remain in a precarious position despite the stock market recovery last year.

The 12.3 per cent growth in the average managed fund in 2003 was a "welcome reprieve" but a sustained period where assets underperformed and liabilities rose faster than expected has left many funds looking for time to get their house in order, Mercer Investment Consulting told its annual investment conference yesterday.

"Many \ are now embarking on a series of funding proposals to the Pensions Board," Mr Tom Murphy, head of the group's Irish operation, said.

Mr Murphy said figures for 2003 also showed that fund managers, chastened by two years of substantial losses, were less likely to adopt a position at odds with the consensus view.

He noted that the top-performing manager, Irish Life, returned growth of 14.9 per cent with the poorest, Standard Life, adding 11.4 per cent to the value of funds.

"Unlike previous years, the difference between the top and bottom performers was only 3.5 percentage points, indicating that the managers did not take any significant bets from the average or peer group approach," Mr Murphy said.

The pensions landscape was changing, he told an audience of trustees and plan sponsors, with an increasing number of foreign fund managers entering the Irish market.

"Trustees are increasingly exploring this avenue," he said.

Mercers has initiated a survey of trustees' attitudes which it claims will be the most comprehensive ever undertaken. It will assess trustees' approach to risk, their perception of investment managers and their willingness to put members' money into alternative investments.

Mr Murphy said it was essential for everyone involved to continuously assess their investment objectives, their tolerances and attitudes to risk and the structures under which their investment managers manage their assets.

"This is simply about good pensions governance - protecting a pool of assets for the future benefit of employees," Mr Murphy said.