IRELAND – Ireland's finance minister has sidestepped the question of whether assets currently held in the National Pensions Reserve Fund (NPRF) will be used to pre-finance pension liabilities once ownership is transferred to a new strategic investment fund.

Addressing the Dáil on the launch of the Ireland Strategic Investment Fund (ISIF) – which will invest the €6.4bn left in the NPRF's discretionary portfolio in infrastructure and other projects to boost the national economy – minister for finance Michael Noonan failed to respond to opposition finance spokesman Michael McGrath's questions on whether gains from the ISIF would be "returned" to the NPRF.

Noonan instead merely reiterated previous comments from the Department of Finance that inward-focused investment was currently a greater priority than pre-funding pension liabilities, as it would leave the state "in a better position to meet its pension obligations in the longer term".

This has widely been taken to mean that the link will be severed, although no official confirmation has been forthcoming.

However, McGrath seemed dissatisfied with the response, asking again if the NPRF would be retained alongside the "principle of providing for the long-term pension liabilities of the state".

The Fianna Fáil TD also sought clarification on whether any gains would be reinvested by the ISIF, or be returned to the NPRF.

Noonan did not respond to McGrath's second enquiry, but earlier in his response noted that any "income, capital or other benefit" a result of ISIF investments would be "reinvested for the benefit of the fund" – seemingly confirming that the link between using the assets to pre-fund liabilities would be severed, allowing for the ISIF to act as a perpetual investment vehicle in Ireland.

Separately, government TD Eoghan Murphy asked whether the ISIF would still seek to invest along the same ethical guidelines currently binding the NPRF, a signatory to the UN-backed Principles for Responsible Investment.

Noonan replied that, because no draft of the legislation was currently available, it was "not possible to give exact details".

But he added: "The existing legislation has such a section, so I do not see why it should be dropped in the new legislation."

The minister also indicated, in response to a further question, that the Department of Finance would rescind its powers to direct the ISIF's portfolio – as is currently the case with the NPRF, a power introduced to allow for the recapitalisation of Allied Irish Banks and Bank of Ireland.

"As with the NPRF commission, the members of the investment committee will have discretion to make investment decisions in line with the ISIF's investment strategy," Noonan said.

"There is no question of the thing being some kind of political slush fund. The fund's investment strategy will be consistent with the government's policy objective."

Noonan nevertheless stressed repeatedly that investment decisions would and should be made solely on a commercial basis, arguing that, if a domestic road project, for example, were deemed unviable, it would not receive any investment income from the fund.