Strong equity markets in May have given Irish pension funds a significant boost. The average group-managed fund reported growth of 3 per cent last month, accounting for almost half of the average 5.9 per cent gain in the year to date.

The position of pension funds was further improved by the continuing decline in bond prices. Bond yields determine the cost of annuities and falling prices ensure pension fund assets go further in meeting their liabilities.

Irish Life Investment Managers reported the strongest performance last month with a return of 3.8 per cent, just ahead of Friends First/F&C on 3.7 per cent. Canada Life/Setanta, which has recently lost a number of key personnel, continued to underperform with a gain of 2 per cent.

So far this year, Standard Life, with a return of 7 per cent, leads its peers, with Canada Life/Setanta, on 4.6 per cent, again propping up the returns table.

Over the last 12 months AIB Investment Managers has outperformed with a return of 21.7 per cent against an average of 18.6 per cent and well ahead of Canada Life/Setanta's lagging 13.7 per cent.

Canada Life/Setanta is now ranked among the bottom two fund managers in terms of performance across all time periods up to the last 10 years, according to figures provided by Rubicon Investment Consulting, one of a number of groups tracking pension fund performance.

Eagle Star has produced the best returns over the three-year period with annual growth of 17.7 per cent and over five years, where its annual return amounts to 9.8 per cent, the same as Standard Life.

Over the 10-year period Oppenheim continues to lead with an annual return of 10.9 per cent.