The largest 300 pension funds in the world collectively managed $24.4 trillion in 2024, according to a new report from WTW’s Thinking Ahead Institute. These investors saw their assets surpass the previous record of $23.6 trillion, set in 2021, reversing three years of losses.
Assets of these funds, which include both defined benefit and defined contribution plans, rose 10% in 2023 and 7.8% in 2024. Strong equity performance globally drove returns, as investors across regions made larger allocations to equity investments.
“The world’s largest pension funds are navigating an increasingly complex landscape,” said Jessica Gao, director of the Thinking Ahead Institute, in a statement, “Macroeconomic volatility, geopolitical shifts and concentrated market risks are reshaping return expectations. The current backdrop has tested even well-diversified portfolios, highlighting the difficulty of today’s investment environment.”
Defined benefit funds accounted for the majority of assets, at 59.4%. DC assets accounted for 27.7% of all assets, followed by reserve funds at 12% and hybrid funds at 0.9%. Approximately 153 funds out of 300 were public sector pension funds or sovereign wealth funds.
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The North American region accounted for nearly half of all pension assets—approximately 47.2% of all assets were held by investors in the region, primarily in the U.S., home to 153 of the 300 funds on the list and accounting for 41.4% of total assets under management.
The 20 largest funds, accounting for 42.4% of all AUM, invested 53.2% of their assets in equities, 28.8% in fixed income and 18% in alternatives and cash.
The largest funds, according to the report, are the Government Pension Fund of Norway ($1.77 billion), the Government Pension Investment Fund of Japan ($1.65 trillion), the U.S. Federal Retirement Thrift ($954 billion), the National Pension of South Korea ($820 billion) and ABP of the Netherlands ($560 billion).
Retirement, Pension Trends
The report noted that defined contribution organizations are concerned their members are not on track for adequate retirement income, with 60% of these groups responding that it is the sector’s biggest challenge over the next decade.
While lifetime income products are being introduced, eliminating longevity risk for beneficiaries continues to remain a complex and largely unaddressed issue, the Thinking Ahead Institute noted.
“While many funds are rethinking their strategies, the solutions must be tailored to different geographical contexts, reflecting variations in regulation, social security systems, and member needs,” the report stated. “Balancing stability, adequacy, and affordability remains a complex task.”
Pension funds are also operating in far more challenging operating environments, due to increasingly complex and interconnected stakeholder demands, with more funds looking to adopt a total portfolio approach model to navigate these challenges.
“With growing complexity and challenges, more funds are exploring the Total Portfolio Approach,” Gao said in the statement. “By aligning purpose, capital and decision-making, and by taking a holistic view of the fund as a whole, TPA is helping organizations strengthen their ability to deliver long-term outcomes.”
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