Pension Giants Lost $3T in 2022, Steepest Drop in 20 Years

Despite losses, the 300 largest funds’ share of global pension assets rose to 43% in 2021.



The world’s 300 largest pension funds saw their assets shed 12.9% in value during 2022 as they tumbled to $20.6 trillion from $23.6 trillion at the end of 2021, according to this year’s Global Top 300 Pension Funds report conducted by WTW’s Thinking Ahead Institute.

The decline was the largest in 20 years and the first time since 2018 that the assets for the top 300 pension funds decreased in value. The results were in stark contrast to the previous year, when the pension funds’ assets surged nearly 9% to record levels.

“In last year’s research, we anticipated rising inflation and interest rate pressures, as well as the potential for slowing growth the following year,” Jessica Gao, director at the Thinking Ahead Institute, said in a release. “With the latest data, we have witnessed the drop in the pension assets, with a fragile global economy seeing equity and bond markets reverse previous gains.”

Japan’s Government Pension Investment Fund retained its title as the world’s largest pension fund for the 20th year in a row, with approximately $1.45 trillion in assets under management. Norway’s Government Pension Fund Global followed with $1.30 trillion in AUM, while South Korea’s National Pension Service was third with $706.6 billion.

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The California State Teachers’ Retirement System cracked the top 10 with $290.4 billion in assets in 2022, although this was down from $313.9 billion a year earlier. CalSTRS knocked out Dutch pension fund PFZW, which fell to 12th place with $231.8 billion. Otherwise, the top 10 remained the same from last year, with Singapore’s Central Provident Fund and China’s National Social Security fund swapping places: The CPF moved up to the eighth spot with $406.7 billion, and the NSS fund dropping one notch to ninth with $347.2 billion.

The Employees’ Provident Fund of India was the only new entrant in the top 20 in 2022, taking the 20th spot with $158.7 billion. The EPF replaced Russia’s National Wealth fund, which dropped to 24th place from 19th place after losing more than $40 billion in value during the year.

According to the report, the U.K. and Japan had the largest number of pension funds fall out of the top 300 globally. The former was attributed in large part to the gilts crisis of September 2022 and the market instability that followed, along with the continuing shift to smaller defined contribution plans from defined benefit pensions.

More than half of the top 300 funds were sovereign and public sector pension funds, accounting for 70.9% of total assets. Sovereign pension funds represented $6.2 trillion in assets, while sovereign wealth funds totaled $11.6 trillion. Among the 300, sovereign wealth fund assets increased 13.9% during 2022, compared with a 10.6% drop for sovereign pension funds.

Despite the $3 trillion plunge in asset value, the top 300 pension funds saw their share of global pension assets among all pension funds of any size rise to 43.0% from 41.1% at the end of 2021.

On a geographical breakdown, North America holds 45.6% of the assets of the world’s 300 largest pension funds, while Asia-Pacific funds account for 26.4%, and European pension funds make up 24.1%, according to the report.

“While market performance has improved from 2022 to 2023, we continue to proceed with a high degree of caution,” Gao said. “Pensions schemes are operating in a new environment, where conditions are changing faster and faster each day.”

 

20 largest pension funds ($ millions)

U.S. funds’ data as of September 30, 2022.
Non-U.S. funds’ data as of December 31, 2022, except where shown.

Rank

Fund

Market

Total Assets

1

Government Pension Investment

Japan

1,448,643

2

Government Pension Fund

Norway

1,300,214

3

National Pension

South Korea

706,496

4

Federal Retirement Thrift

U.S.

689,858

5

ABP

Netherlands

490,382

6

California Public Employees

U.S.

432,235

7

Canada Pension

Canada

420,7641

8

Central Provident Fund

Singapore

406,711

9

National Social Security

China

347,2142

10

California State Teachers

U.S.

290,384

11

New York State Common

U.S.

233,227

12

PFZW

Netherlands

231,781

13

New York City Retirement

U.S.

228,170

14

Employees Provident Fund

Malaysia

227,781

15

Local Government Officials

Japan

207,145

16

Florida State Board

U.S.

183,092

17

Ontario Teachers

Canada

182,410

18

AustralianSuper

Australia

176,4463

19

Texas Teachers

U.S.

173,277

20

Employees’ Provident

India

158,7222

  1. As of March 31, 2023
  2. Estimate
  3. As of June 30, 2022

Source: WTW’s Thinking Ahead Institute

 

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