World’s top pension funds see the largest assets fall in 20 years

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[{"type":"text","content":"North America now accounts for nearly half of assets in world’s 300 largest pension funds\nARLINGTON, Va., Sept. 11, 2023 (GLOBE NEWSWIRE) -- The world’s largest 300 pension funds saw their assets decline for the first time since 2018, according to this year’s Global Top 300 Pensions Funds conducted by WTW’s Thinking Ahead Institute. This drop is on par with the decline observed in 2008, occurring at a pace that has only been encountered twice in the 20-year history of this annual study. The research highlights high-level trends in the pension fund industry and provides information on the changing composition of the top 300 list of pension funds globally as well as the characteristics and investment allocations of these pension funds. By the end of 2022, combined assets of the world’s top 300 pension funds had decreased by 12.9% and now total $20.6 trillion compared with $23.6 trillion at the end of 2021. This represents a sharp correction compared with the 8.9% increase in the assets of the largest 300 pension funds in the previous year. The latest drop is also greater than the 12.6% decline in 2008, at the time of the global financial crisis. Until now, the 2008 fall had been the fastest annual decline recorded in the 20 years of the study. The U.K. and Japan had the largest number of pension funds fall out of the top 300 globally. The U.K. gilts crisis of September 2022 and the ensuing market instability were significant contributing factors, as was the continuing shift from defined benefit pensions to smaller defined contribution plans. In 2022, sovereign and public sector pension funds accounted for 152 funds in the top 300, representing 70.9% of total assets. Sovereign pension funds accounted for $6.2 trillion in assets, while sovereign wealth funds totaled $11.6 trillion. Sovereign wealth funds’ assets grew by 13.9% during 2022, compared with a decrease of 10.6% for the sovereign pension funds in the Thinking Ahead Institute top 300 study. “We sounded a note of caution last year when reporting on a previous record. In last year’s research, we anticipated rising inflation and interest rate pressures, as well as the potential for slowing growth the following year,” said Jessica Gao, director at the Thinking Ahead Institute. “With the latest data, we have witnessed the drop in the pension assets, with a fragile global econom...

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