SYDNEY, September 11, 2023 – The world’s largest 300 pension funds have seen a fall in assets for the first time since 2018. This drop is on par with the decline observed in 2008, occurring at a pace that has only been encountered twice in the twenty-year history of this annual study, according to this year’s research Global Top 300 Pensions Funds report conducted by the Thinking Ahead Institute, in conjunction with Pensions & Investments, a leading U.S. investment publication.
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, the characteristics and investment allocations of these pension funds.
By the end of 2022, combined assets of the world’s top 300 pension funds decreased by 12.9%, now totalling US$ 20.6 trillion compared to US$ 23.6 trillion at the end of 2021. This represents a sharp correction compared to an 8.9% increase in the assets of the largest 300 pension funds in the previous year. The latest drop is also faster than a 12.6% annual fall 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 UK and Japan had the largest number of pension funds fall out of the top 300 globally. The UK gilts crisis of September 2022 and the ensuing market instability were significant contributing factors, as is the continuing shift from defined benefit (DB) pensions to smaller defined contribution (DC) 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 US$ 6.2 trillion in assets, while sovereign wealth funds (SWF) totalled US$ 11.6 trillion. Sovereign wealth funds’ assets grew by 13.9% during 2022, compared to a decrease of 10.6% for the sovereign pension funds in the Thinking Ahead Institute Top 300 study.
Jessica Gao, director at the Thinking Ahead Institute, reflects on key insights from the research: “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. 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.
“2022 recorded historic levels of economic uncertainty and market instability. A convergence of regime, geopolitical, and systemic risks magnified in a VUCA-fest (characterised by volatility, uncertainty, complexity, and ambiguity), challenging pension funds to navigate and adapt within this rapidly changing environment.”
Ellie Boston-Clark, Co-Head of Governance, Investments Australia, WTW commented: “Australia had 16 funds included in the top 300, with most improving their ranking on last year. AustralianSuper remained the only fund in the top 20 globally, but the merger of Sunsuper and QSuper to create the Australian Retirement Trust saw it move to 21st place this year. The Future Fund remained in 26th place, while there were two new entrants, EquipSuper and Spirit Super, both a result of underlying mergers. All other Australian funds improved their ranking in 2022.
“The ongoing consolidation in Australia’s superannuation industry has been a major contributor to the rise in ranking of Australian funds, despite the slight weakening of the Australian dollar over the period. We expect the prominence of Australian funds among the top global asset owners to continue in coming years, but as their scale grows, in an ever more challenging and uncertain environment,, they will need to shift their focus increasingly to a strong governance focus. This is essential to maintain long-term stability and ensure they meet their performance objectives.”
Compared to all pension funds of any size, the world’s largest 300 pension funds now represent 43.0% of the global pension assets (compared to 41.1% in 2021), according to the Thinking Ahead Institute’s annual Global Pension Assets Study which estimates global pension fund assets across 22 major pension markets (the P22).
Regionally, North America now accounts for 45.6% of assets in the world’s 300 largest pension funds, while European pension funds account for 24.1% and Asia-Pacific 26.4%.
Looking at the very largest, the assets of the top 20 pension funds decreased by 11.8% in the last year, a slight improvement compared to the 12.9% downturn observed within the top 300 funds overall. The top 20 funds accounted for 41.5% of the asset under management (AUM) in the ranking, modestly above 2021’s share of 41.0%.
The Government Pension Investment Fund of Japan (GPIF) remains the very largest pension fund, leading the table with AUM of US$1.4 trillion. It has ranked top since 2002. Meanwhile, the Employees’ Provident Fund of India was the only new entrant in the top 20 funds for 2022.
| 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 | 420,764 |
| 8 | Central Provident Fund | Singapore | 406,711 |
| 9 | National Social Security | China | 347,214 |
| 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 | 176,446 |
| 19 | Texas Teachers | U.S. | 173,277 |
| 20 | Employees’ Provident | India | 158,722 |
| 2022 rank | 2021 rank | Fund | Total assets |
|---|---|---|---|
| 18 | 20 | AustralianSuper | $176,4463 |
| 21 | N/A* | Australian Retirement Trust | $157,8473 |
| 26 | 26 | Future Fund | $133,618 |
| 41 | 46 | Aware Super | $99,3153 |
| 67 | 77 | UniSuper | $68,8593 |
| 84 | 127 | HOSTPLUS | $54,5073 |
| 99 | 125 | Cbus | $47,6293 |
| 107 | 121 | REST | $44,7113 |
| 109 | 123 | HESTA | $44,4223 |
| 132 | 140 | CSC | $37,7703 |
| 174 | 181 | State Super | $28,4163 |
| 205 | 219 | GESB | $25,0103 |
| 222 | 232 | ESSSuper | $23,2233 |
| 231 | 238 | Super SA | $22,4033 |
| 255 | - | EquipSuper | $20,1573 |
| 292 | - | Spirit Super | $17,1053 |
*Merger of Sunsuper/QSuper
3 As of June 30, 2022
The Thinking Ahead Institute was established in January 2015 and is a global not-for-profit investment research and innovation member group made up of institutional asset owners and asset managers committed to mobilising capital for a sustainable future. It has over 55 members around the world, with combined responsibility for over US$16 trillion, and is an outgrowth of WTW Investments’ Thinking Ahead Group - set up in 2002.
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