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The world’s largest 300 pension funds returned to growth in 2023, erasing much of the decline of the previous year. However, the assets of the largest pension funds are still not yet back to their record highs, according to this year’s Global Top 300 Pension Funds report by leading global advisory, broking and solutions company WTW’s Thinking Ahead Institute.

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, including the characteristics and investment allocations of these pension funds.

In 2023, the top 300 pension funds’ assets under management (AuM) recorded an increase of 10% to $22.6 trillion compared with AuM of $20.6 trillion at the end of 2022, as markets stabilized somewhat from the high level of global economic uncertainty the previous year. This was a significant turnaround from the 13% fall in assets experienced in 2022.

Growth has remained faster among the biggest funds, as the top 20 largest pension funds in the world recorded an increase in assets of 12% during the past year, outpacing their smaller peers. This faster growth also holds true over time, with a compound annual growth rate for the past five years of 5.4% for the top 20 pension funds compared with 4.7% for the entire top 300.

The Government Pension Investment Fund of Japan remained the largest pension fund in the world, with AuM of $1.59 trillion, a position it has held since 2002. However, with assets of $1.58 trillion, the Government Pension Fund of Norway is just 0.5% smaller and may claim this top spot next year after recording an impressive 22% growth in assets in the 12-month period.

“While it is positive to note a return to growth among the world’s largest pension funds in 2023, the combination of a more uncertain macroeconomic environment and rising geopolitical instability means there is increasing complexity in the investment landscape,” said Jessica Gao, director, Thinking Ahead Institute.

Last year was characterized by the rising inflation and interest rate environment, both of which have since tapered off, but the outlook is by no means certain. Although the first half of 2024 has offered a degree of stability, uncertainty is still high, with volatility persisting in the global economy, heightened by geopolitical developments, including multiple significant elections.

Overall, defined benefit (DB) funds remain the largest share of assets, accounting for 61% of total disclosed AuM, followed by defined contribution (DC) fund assets (26%) and reserve funds (12%). DB funds accounted for a majority share of assets in North America (72%), Asia Pacific (63%) and Europe (46%) in 2023, while DC plans dominated other regions (68%), particularly in Latin America.

On average, the top 20 largest pension funds invested approximately 43% of their assets in equities, 35% in fixed income, and 22% in alternatives and cash. There is a significant regional divergence, however, in the asset allocation decisions by these largest funds. Europe has the lowest weighting to equities at 31% compared with bonds at 58%; North America has an equity weighting of 45% and just 23% in bonds, while in Asia Pacific it is fairly balanced with 45% in equities and 48% in bonds.

“We previously warned of the need to address rising systemic risk,” said Gao, “where an entire system (like climate) malfunctions and puts emphasis on the need for a forward-thinking and re-positioning strategy.

“Since setting the first net-zero commitments in 2020, the asset management industry has faced this challenge under significant time pressure. Four years later, it has developed into a state that is emergent but unfortunately not yet fully formed,” concluded Gao.

Top 20 pension funds (US$ millions)

U.S. fund data are as of September 30, 2023. Non-U.S. fund data are as of December 31, 2023, except where shown.

Rank	Fund	Market	Total assets
1	Government Pension Investment	Japan	1,593,141
2	Government Pension Fund	Norway	1,584,524
3	National Pension	South Korea	801,864
4	Federal Retirement Thrift	U.S.	782,835
5	ABP	Netherlands	552,376
6	Canada Pension	Canada	477,676 (1)
7	California Public Employees	U.S.	452,453
8	Central Provident Fund	Singapore	432,509
9	National Social Security	China	364,351 (2)
10	California State Teachers	U.S.	309,931
11	PFZW	Netherlands	262,261
12	New York City Retirement	U.S.	247,999
13	Employees Provident Fund	Malaysia	247,268
14	New York State Common	U.S.	246,307
15	Local Government Officials	Japan	226,803
16	AustralianSuper	Australia	204,631 (3)
17	Florida State Board	U.S.	194,659
18	Ontario Teachers	Canada	186,897
19	Texas Teachers	U.S.	181,656
20	Labor Pension Fund	Taiwan	176,267

1. As of March 31, 2024
2. Estimate
3. As of June 30, 2023

About the Thinking Ahead InstituteThe Thinking Ahead Institute was established in January 2015 and is a global not-for-profit investment research and innovation member group made up of engaged institutional asset owners and asset managers committed to mobilizing capital for a sustainable future. It has 52 members around the world and is an outgrowth of the WTW Investments’ Thinking Ahead Group, which was set up in 2002. Learn more at https://www.thinkingaheadinstitute.org/.

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