1. Background
The Minister for Finance guarantees the repayment and servicing of moneys invested by depositors in the Post Office Savings Bank. An Post remits the net proceeds to the National Treasury Management Agency (the Agency). The Post Office Savings Bank Fund (“Fund”) does not form part of the Exchequer.
The Minister for Finance may appropriate for the Exchequer any accumulated surplus in the Fund after making appropriate provision for depreciation in the value of the Fund’s assets available to meet the liabilities to the depositors (Finance Act 1930, Sect 19(1)).
During 2016 the Fund had the following main purposes:
- to invest the moneys made available by depositors, and
- to act as an intermediary through which sale and repurchase (repo) transactions and secondary market trading could be transacted by the Agency, and
- to provide moneys under Central Treasury Services to designated state bodies.
Prior to 1 January 2016 the Fund was used as an intermediary for the purpose of primary issuance including the tranching, cancellation and sale of securities issued by the Agency. Section 87 of the Finance Act, 2015 amended the Finance Act, 1970 to facilitate this change in regard to the cancellation of securities and permits the Minister to purchase and cancel securities created or issued by him or under any other provision of an Act of the Oireachtas whenever and so often as he thinks fit and in any manner, whether in the open market or otherwise.