In July, Irish pension managed funds declined by 2.5% on average. Setanta Asset Management was the best performing manager over the month with a return of -1.1%. Hibernian Investment Managers delivered the worst performance over the month, declining 3.3%. So far this year, pension funds are well in the red, by 16.9% on average. Irish pension funds have now lost 20.6% of their value over the past twelve months.

The average managed fund has shown a very disappointing return of -0.3% per annum over the past three years. The five year returns to the end of July are somewhat better, with the average managed fund delivering a return of 5.4% per annum over this period. As a result of two severe equity bear markets over the past ten years, Irish group pension managed fund returns over this period have been a disappointing 2.6% per annum on average, compared with an Irish inflation rate of 3.8% per annum over the same time horizon.

Fiona Daly of Rubicon Investment Consulting commented: "When considering these returns it is important to remember that the investment horizon of most pension schemes is generally over 25 years, and that equities have historically provided significantly higher returns over the long-term than bonds, property or cash, although at the cost of greater volatility.

It is worth noting that members of defined benefit schemes and younger members of defined contribution schemes should not get overly worried about short or medium term declines in equity markets. However, older members of defined contribution schemes need to ensure that they adopt a lower risk investment strategy as they approach retirement age. "