PENSION FUNDS stood still last month as stock markets struggled for direction. The average return of group-managed pension funds was just 0.2 per cent.

Six of the fund managers recorded zero growth, but just one, Hibernian Investment Managers, lost ground, shedding a fractional 0.1 per cent. On the upside, Canada Life/Setanta led the way with a gain of 1.2 per cent.

Pension funds are still significantly in the red this year despite recovering some ground in April.

Over the first five months of the year, the average loss of Irish pension fund managers was 7.5 per cent. Over the past 12 months, funds have shed, on average, 14.9 per cent of their value.

Over the past year, Bank of Ireland Asset Management (-18.1 per cent) and KBC Asset Management (-17.3 per cent) have fared particularly badly. Yet, even the strongest fund, Canada Life/Setanta, is 11.4 per cent in the red over the period as pension fund managers grapple with stock market volatility driven by the credit crunch, the dramatic rise in oil prices and a general downturn in the global economy and, more particularly, construction.

Returns are better over the three-year period, with all funds recording some gains - albeit just 1.9 per cent per annum at BIAM compared to an industry average of 5.2 per cent per annum and a market leading 7.4 per cent by rival AIB Investment Managers.

Returns over five years are even better, but many pension funds continue to struggle to match inflation over the longer, and more relevant, 10-year period in which they have had to contend not just with the current market malaise but the collapse of the dotcom boom.

The average 10-year return of 3.9 per cent per annum compares with an average inflation rate over the same period of 3.8 per cent.