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The National Pensions Reserve Fund: Pitfalls and Opportunities

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  • P. R. Lane

Abstract

This paper analyses some key issues concerning the new National Pensions Reserve Fund. We briefly review the basic demographic and economic trends that motivate the establishment of the Fund. We consider the pitfalls facing the operation of the Fund and argue that a complete ban on domestic investment would minimise the politicisation problem. At least initially, the Fund should adopt an aggressive investment strategy, with a large equity allocation. We further argue that asset allocation should take into account the co-variation of returns with domestic macroeconomic and fiscal variables. Finally, we discuss the organisational structure of the Fund and its implications for optimal performance.

Suggested Citation

  • P. R. Lane, 2001. "The National Pensions Reserve Fund: Pitfalls and Opportunities," Trinity Economics Papers 20017, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:20017
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    File URL: http://www.tcd.ie/Economics/TEP/2001_papers/tepno7PL21.PDF
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    Cited by:

    1. Tang, Yunshu & Ruan, Yaoyun & Xu, Yongqing & Li, Yaokuang, 2020. "Feedback analysis of population, economy and pension: Moderate scale of China’s pension strategic reserve," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 551(C).
    2. repec:esr:chaptr:jacb200114 is not listed on IDEAS
    3. Honohan, Patrick, 2001. "European and International Constraints on Irish Fiscal Policy," Papers BP2002/2, Economic and Social Research Institute (ESRI).

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