IRELAND - Hewitt's Irish managed Fund Index (IMFI) measuring pension fund performance was down 21% over the last 12 months, the consultancy has announced today.
Reidy added: "The last 12 months to the end of June have been a particularly difficult period for all pension funds, in particular those with relatively high exposure to Irish equities."
Hewitt explained this could be "disastrous" for a member of a defined contribution fund close to retirement.
According to Hewitt, DC members would be generally advised to remove the equity risk from their pension funds by overweighting bonds in the last years of retirement.
Historically the majority of the risk inherent in Irish pension funds has arisen through the large allocation to equities with a strong home bias.
A more diversified portfolio, across equity regions and asset classes should experience less volatility, Hewitt advised.
Reidy concluded: "Separately, recent disastrous market performance highlights the benefit of being a member of a defined benefit (DB) pension scheme, particularly a well managed one, where the employer, or indeed the government for those working in the public sector, takes all or part of the investment risk for member."
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