Compared to all pension funds of any size, the 300 largest pension funds in the world now represent 43% of global pension assets (up from 41.1% in 2021), according to the annual Global Pension Assets Study by the Thinking Ahead Institute, which estimates the assets of global pension funds in the 22 main pension markets.
The 300 largest pension funds in the world have seen a drop in their assets for the first time since 2018. This decline is on par with the one observed in 2008, occurring at a rate that has only happened twice in the twenty-year history of this annual study. By the end of 2022, the combined assets of the 300 largest pension funds in the world decreased by 12.9%, reaching a total of 20.6 trillion dollars compared to the 23.6 trillion at the end of 2021. This represents a sharp correction compared to the 8.9% increase in assets managed by the 300 largest pension funds in the previous year. The latest drop is also faster than the 12.6% annual drop recorded in 2008, at a time of global financial crisis. Until now, this had been the fastest annual decline recorded in the 20 years of the study.
The Government Pension Investment Fund of Japan (GPIF) remains the largest pension fund, and tops the table with assets of 1.4 trillion dollars. It has held the top spot since 2002. Meanwhile, the Employees' Provident Fund of India joins as the only new participant among the top 20 funds of 2022.
The United Kingdom and Japan recorded the highest number of pension fund falls among the world's top 300. The crisis of the British "gilts" in September 2022 and the subsequent market instability were significant factors, as was the growing shift from defined benefit plans to smaller defined contribution plans.
In 2022, sovereign and public sector pension funds accounted for 152 of the top 300, representing 70.9% of total assets. Sovereign pension funds amounted to 6.2 trillion dollars in assets, while sovereign investment or "Wealth funds" (SWF) totaled 11.6 trillion dollars. The assets of sovereign investment funds grew by 13.9% during 2022, compared to the decline of 10.6% of the sovereign pension funds included in the Top 300 study of the Thinking Ahead Institute.
North America currently represents 45.6% of the assets of the world's 300 largest pension funds, while European pension funds represent 24.1% and those of Asia-Pacific 26.4%.
As for the largest ones, the assets of the 20 largest pension funds decreased by 11.8% in the last year, a slight improvement compared to the 12.9% drop observed in the set of the 300 largest funds. The 20 largest funds represented 41.5% of the assets under management (AUM) of the ranking, slightly above the 2021 share, which was 41%.
This is a story of two halves. On the one hand, a new record for the world’s major pension funds illustrates the optimism that defied a global pandemic. Yet on the other, growth is slowing and the long-term dashboard is flashing amber. 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.Pension funds are also under immense governance pressure from all sides, with a growing politicisation of ESG in some regions meeting calls for more substantial and urgent climate action. The addition of stark short-term economic pressures alongside these structural long-term changes will only add to the difficulty of balancing short-term financial resilience with long-term financial and climate sustainability.
Marisa Hall, co-head of the Thinking Ahead Institute
The Government Pension Investment Fund of Japan (GPIF) remains the largest pension fund, and tops the table with assets of 1.4 trillion dollars. It has held the top spot since 2002. Meanwhile, the Employees' Provident Fund of India joins as the only new participant among the top 20 funds of 2022.
The Netherlands is top of the class when it comes to comparing pension systems around the world, according to a recent global pensions report from the Mercer CFA Institute. The ranking looked at more than 50 indicators and compared 47 retirement income systems, covering 64% of the world's population.
Japan's Government Pension Investment Fund rebounded in the third quarter of fiscal 2023, returning 2.62%, after reporting a slight loss the previous quarter, to raise its total asset value to 224.7 trillion yen ($1.51 trillion).
In a bold step tailored to meet the existential challenges and colossal financial risks of a warming climate and harness the massive opportunities of the shift to a new clean economy, California Public Employees' Retirement System, the largest public pension fund in the U.S. managing $446 billion, announced plans to ...
Although the Netherlands, Austria, Luxembourg and Denmark are overall the best performers on social security, it does not mean that they are in the top four on each indicator. As for poverty issues, Luxembourg performs well, with just 5% of the population living below the poverty line in 2011 (Figure 1).
The Social Security program is not a pension plan. It is a social insurance plan meant to supplement a retired worker's pension and savings. If a worker has paid into Social Security, they can start drawing benefits at retirement age.
That's The Netherlands. Its retirement system scored an A, with a lofty 85 overall index score. Iceland (83.5) and Denmark (81.3) took second and third places. Argentina had the lowest index value at 42.3.
If there is any “crisis” for pension plans, it starts with the costs of paying for growing unfunded liabilities. State and local pension funds reported more than $1 trillion in unfunded liabilities in 2020. They reported just under $1 trillion in funding shortfall for 2021.
As of the fourth quarter of 2023 (December 31st), aggregate public pension assets were $5.99 trillion, an increase of 7.9 percent from the $5.56 trillion reported for the prior quarter. This value is higher than the same quarter one year ago by some $438 billion, or 10.5 percent.
The total value of DB pension plan assets among the 100 largest U.S. plans at the end of 2023 reached $1.32 trillion, according to Milliman. The plan with the most assets was Ford, which had $54.4 billion in assets. IBM was second, with $53.5 billion. General Motors came in third with $52.1 billion.
For 2024, the maximum monthly amount you could receive if you start your pension at age 65 is $1,364.60. The average monthly amount paid for a new retirement pension (at age 65) in January 2024 was $831.92. Your situation will determine how much you'll receive up to the maximum.
Established in 1951, EPF is the 12th largest pension fund in the world with 15.72 million members and total assets of about 1 trillion ringgit, its 2022 annual report said.
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