Divisions have emerged between the leader of Fine Gael, Mr Michael Noonan, and the party's deputy leader, Mr Jim Mitchell, over the future for the country's National Pension Reserve Fund, which is currently worth €8 billion.
Set up with part of the proceeds of the Telecom Éireann privatisation, the fund will receive 1 per cent of the country's gross domestic product annually over the next 25 years to pay for the country's future needs.
Last weekend, Mr Noonan said some of the money held in it should be invested now in badly needed toll roads and public transport, which would then produce revenue for the fund.
However, Mr Mitchell said investment decisions should be in the hands of the National Pensions Reserve Fund Commission, which is obliged under the law to make "prudent investment" decisions.
"We are not proposing to have any change in the current law. I want to say that absolutely categorically. The commission is in charge of the fund and they are the people to call the shots," Mr Mitchell told RTÉ's This Week.
The 1 per cent payment by the Government, which currently stands at €850 million a year, needs to be increased in time to cope with the looming pensions crisis caused by Ireland's ageing population.
A spokesperson for the commission said yesterday that the fund has spread its investments around the world to maximise returns and minimise risk.
Currently, between 1 and 2 per cent of the fund is held in Irish equities.
Under Minister for Finance Mr McCreevy's legislation, the fund will meet 30 per cent of pension payments from 2025.
"That is too low a provision. I want to make it clear that I want to see more set aside in the future rather than less," said Mr Mitchell, Fine Gael's finance spokesperson.
The Minister for Social, Community and Family Affairs, Mr Ahern, said the fund was "a strategic decision" by the Government.
"You don't have to be a rocket scientist to see that many people like myself will be of pension age in 25 years' time. We need to provide for that."
Mr Mitchell's strong support for the fund could create difficulties with the Labour Party in any programme for government talks which could take place following the general election.
So far, the Labour Party's finance spokesperson, Mr Derek McDowell, has said that the annual investment into the fund should be scaled up or down depending on the state of the economy.
The annual investment into the fund will surprise many, he said. "We could build the National Stadium twice over this year and have change. We do support it in principle, but there has to be balance."
The Telecom Éireann flotation proceeds and the Government's contributions for 1999 and 2000 were paid into a holding account until the fund was formally set up in April 2000.
