Global Pensions Assets Climb to Record $58.5 trillion

Global pensions assets rose by 4.9% year on year in 2024, reaching a record $58.5 trillion, led by growth in the largest defined contribution (DC) markets, according to the latest Global Pension Assets Study from WTW’s (NASDAQ: WTW) Thinking Ahead Institute.

This compares with $55.7 trillion at the end of 2023, when the same Thinking Ahead Institute study measured a return to growth after the sharp fall in global pension assets in 2022. Despite the rise in overall assets, significant differences appear between regions.

The U.S. remains the biggest pensions market by far, with a significant 65% share of global pension assets. When the U.S. is combined with the next three largest pension markets — Japan, Canada, and the U.K. — these four regions equate to 82% of all global pension assets.

Looking specifically at the P7 countries — the seven largest pension markets globally (the four mentioned above plus Australia, Netherlands and Switzerland) — DC now accounts for 59% of total assets compared with just 40% in 2004. This shift is being driven by DC plans’ higher exposure to growth assets, which has seen DC assets grow by 6.7% per year since 2014, while defined benefit (DB) assets have grown at a slower pace of 2.1% per year.

While relatively little change in the ranking of these seven largest pension markets has occurred over the past 20 years, the growth in some regions, primarily those with larger DC markets, is far outstripping others. Since 2014, the size of Australian pension assets has grown by 110% in local currency, and the size of U.S. pension assets has grown by 75%. Both markets have a substantial skew toward DC pension funds, with 89% of Australian assets and 69% of U.S. assets in DC plans.

Notably, the Australian market has experienced phenomenal growth, with the size of assets increasing by nearly 500% over the past 20 years. If Australia maintains its current growth trajectory, it could become the second largest pension market globally by 2030.

When assessing growth rates in local currency in the major pension markets, the U.K. was the only country in the study to exhibit negative annual growth over the past year, at –0.7%. This decline is consistent with long-term data. The U.K. recorded the slowest growth among P7 countries over the past 10 years, with its global share of pension assets declining from 8.8% of the largest 22 markets (i.e., the P22) in 2014 to 5.4% in 2024.

In the previous year, only a quarter (27%) of U.K. assets were formed of DC pensions, whereas an overwhelming three-quarters were formed of DB pensions. Of the top 7 pension markets, the U.K. allocated the largest proportion to bonds at 56%, closely followed by Japan at 55%.

“The rise of DC becomes more pronounced every year that we conduct this study,” said Jessica Gao, director, Thinking Ahead Institute. “While global pension assets continue to reach new record levels, it is those markets with larger pools of DC assets that are the main engine behind this continued growth. As the size of these asset pools continues to increase, we are seeing increased influence by governments toward pension funds, primarily through regulation, which has expanded in line with both the size and growing significance of pensions in society. This has been particularly evident in countries such as Canada, Australia and the U.K.

“A key trend that we have observed over the past few decades is the rotation from equities into alternative assets, as pension schemes have turned to private equity, property and hedge funds, to diversify their portfolios and boost returns,” continued Gao. “The understanding of these specialist asset classes has also deepened considerably. In the past, alternatives were grouped into a single category, but we now see a more granular approach being taken to these investments, with asset owners making distinct allocations of capital to the different asset classes such as private debt, commodities, liquid alternatives and infrastructure.”

 About the Thinking Ahead Institute

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 engaged institutional asset owners and service providers committed to changing and improving the investment industry for the benefit of the end saver. It has over 55 members around the world and is an outgrowth of WTW Investments’ Thinking Ahead Group, which was set up in 2002.

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