World’s 300 Largest Pension Funds’ Assets Rise to Record $23.6 Trillion

Japan’s GPIF remains the largest pension fund in the world for the 20th straight year.

The 300 largest pension funds in the world saw their assets under management increase by 8.9% to a record $23.6 trillion in 2021, according to a report from WTW’s Thinking Ahead Institute.  

The Government Pension Investment Fund of Japan remained at the top of the list as the world’s largest pension fund for the 20th straight year, with assets of more than $1.73 trillion. Norway’s Government Pension Fund Global was second with just under $1.44 trillion, and South Korea’s national pension fund was third with just under $800 billion.

Despite the record in assets, growth has slowed from 11.5% in 2020. However, WTW’s report says this should be expected after the strong performance in the markets during 2020. Still, it was enough to increase the cumulative growth to 50.2% during the five-year period of 2016 through 2021.

“On the one hand, a new record for the world’s major pension funds illustrates the optimism that defied a global pandemic,” Marisa Hall, co-head of the Thinking Ahead Institute, said in a statement. “Yet on the other, growth is slowing and the long-term dashboard is flashing amber.”

According to WTW’s research, North America accounts for 45.6% of the world’s 300 largest pension funds’ assets, up from 41.7% at the end of 2020. European pension funds account for 25.9% and Asia Pacific funds account for 25.5%, while Latin America and Africa account for the remaining 4%.

Nearly half (148) of the top 300 pension funds are from the U.S., and account for nearly 40% of the total assets under management. The U.K. is a distant second with 23 pension funds on the list, followed by Canada (18), Australia (15), the Netherlands (12) and Japan (11).

Defined benefit fund assets continue to account for the majority, or 63.5%, of the total assets; however, that share has gradually declined over the years as defined contribution funds (23.8%), reserve funds (11.8%) and hybrid fund assets (0.9%) have slowly increased their share.

The top 20 pension funds now account for 41.0% of the total assets, down slightly from the previous year, and on average invested approximately 53.5% of their assets in equities, 27.9% in fixed-income securities and 18.6% in alternatives and cash.

“While allocations to private markets declined compared with the previous year, we believe this was mostly caused by shorter-term inflationary and rate-hike fears,” Hall said. “We expect private markets will continue to expand considerably in the investment space over the long term, reflecting a need for new primary investment to support new models of sustainable economic growth.”

She added that the majority of pension funds are concerned about growing market volatility and are looking for additional ways to increase the diversity of their investments, specifically in the context of global economic slowdown.

“Looking ahead, rising inflation and subsequent central bank action are likely to cause global growth to falter, which may in turn endanger longer term the funding status of pension funds,” Hall added. “Pension funds are also under immense governance pressure from all sides, with a growing politicization of ESG in some regions meeting calls for more substantial and urgent climate action.”

Top 20 Pension Funds

Fund Market Total assets ($MM)
1 Government Pension Investment Japan $1,730,900
2 Government Pension Fund Norway $1,437,111
3 National Pension South Korea $797,968
4 Federal Retirement Thrift U.S. $774,176
5 ABP Netherlands $630,358
6 California Public Employees U.S. $496,820
7 Canada Pension Canada $426,7461
8 National Social Security China $406,7872
9 Central Provident Fund Singapore $374,990
10 PFZW Netherlands $315,467
11 California State Teachers U.S. $313,940
12 New York State Common U.S. $267,756
13 New York City Retirement U.S. $266,702
14 Local Government Officials Japan $248,572
15 Employees Provident Fund Malaysia $242,602
16 Florida State Board U.S. $213,792
17 Texas Teachers U.S. $196,727
18 Ontario Teachers Canada $191,140
19 National Wealth Fund Russia $180,6903
20 AustralianSuper Australia $169,0554

1As of March 31, 2022; 2Estimate; 3As of January 1, 2022; 4As of June 30, 2021

Source: WTW

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