Global Pension Fund Assets Hit Record High in 2011

January 30, 2012 (PLANSPONSOR.com) - Global institutional pension fund assets in the 13 major markets grew by 4% during 2011. 

This growth brings fund assets to a new high of $28 trillion, up from $26 trillion in 2010, according to Towers Watson’s “Global Pension Assets Study.” The growth is the continuation of a trend that started in 2009 when assets grew 17%, and in sharp contrast to a 21% fall during 2008, which took assets back to 2006 levels. Global pension fund assets have now grown at over 6% on average annually (in USD) since 2001, when they were valued at $15 trillion.

The study reveals that, despite the growth in assets, pension fund balance sheets weakened globally during 2011, with the ratio of global assets to liabilities well down from its peak achieved in 1999. According to the study, pension assets now amount to 72% of global GDP, although lower than in 2010 (76%), substantially higher than the 61% recorded in 2008.

Other highlights from the report include:

Global Asset Data for the P13 in 2011 

•  The 10-year average growth rate of global pension assets (in local currency) is over 6%;

•  The U.S., Japan and the UK remain the largest pension markets in the world, accounting for 59%, 12% and 9% respectively of total pension fund assets globally;

•  All markets in the study, except Japan, have positive 10-year compound annual growth rate (CAGR) figures (in local currency);

•  In terms of 10-year CAGR figures (in local currency terms), Brazil has the highest growth of 14% followed by South Africa (13%), Hong Kong (10%) and Australia (9%). The lowest are Japan (-1%), France (1%), Switzerland (4%) and Ireland (4%); and

•  Ten-year figures (in local currency) show the UK has grown its pension assets the most as a proportion of GDP (by 30% to be 101% of GDP), followed by Australia (up 24% to 96% of GDP), the Netherlands (up 23% to 133% of GDP), Hong Kong (up 15% to 34% of GDP) and the U.S. (by 12% to 107% of GDP).  During this time, Japan's ratio of pension assets to GDP has fallen by 1% to 55% of GDP.