Top Pension Fund Assets Hit $15 Trillion

ARLINGTON, Va.--()--Total assets of the world’s largest 300 pension funds grew by over 6% in 2013 (compared to around 10% in 2012) to reach a new high of almost $15 trillion (up from $14 trillion in 2012), according to Pensions & Investments and Towers Watson (NYSE, NASDAQ: TW) research. The P&I/Towers Watson global 300 research, conducted in conjunction with Pensions & Investments, a leading U.S. investment newspaper, shows that by individual region, Latin American and African funds had the highest five-year combined compound growth rate of over 16% (albeit from a low base), compared to Europe (12%), North America (approximately 6%) and Asia Pacific (approximately 5%). The research also shows that the world’s top 300 pension funds now represent roughly 47% of global pension assets.1

According to the research, defined benefit (DB) funds account for 67% of total assets, down from 75% five years ago. During 2013, DB assets grew by approximately 3%, compared to reserve funds2 (15%), defined contribution (DC) plans (over 9%) and hybrids (over 8%).

“Quantitative easing (QE) and easy monetary conditions have provided an unexpected tailwind for equity markets for the last five years or so, which continued strongly in 2013,” said Chris Ford, global head of Investment at Towers Watson. “This clearly helped many funds given their high allocation to equities. Despite ongoing high performance from equities, many funds, particularly more mature funds, continue to diversify into other asset classes as they de-risk their portfolios. There is also broad acknowledgement that QE and low interest rates will not last forever, and recent exceptional equity market growth is unlikely to repeat in 2015.”

According to the research, the U.S. remains the country with the largest share of pension fund assets, accounting for 36%. Japan has the second-largest market share of roughly 13%, largely because of the Government Pension Investment Fund. That fund, which is still at the top of the ranking (a position it has held for the past 10 years), has assets of approximately $1.2 trillion. The Netherlands has the third-largest market share, with 7%, while Norway and Canada are fourth and fifth largest, respectively, with over 6% share each.

1Estimation based on the P&I/Towers Watson global 300 ranking and Towers Watson Global Pension Asset Study.
2Reserve funds are set aside by a national government to guarantee pension payments and are characterized by no explicit liabilities, and hence are neither DB nor DC.

*Real-asset strategies include a wide range of investment opportunities (e.g., in agriculture, farmland, timberland, water [including water rights] and natural resources). The distinctive characteristic of real assets is tangible underlying assets, and their connection to the food and resource scarcity theme.

The research shows that 38 new funds entered the ranking during the past five years, and on a net basis, the countries that contributed the most new funds were Australia (three funds), followed by Canada, Colombia, Poland, Russia and South Korea (two funds each). During the same period, the U.S. had a net loss of 12 funds from the ranking, yet it still accounts for 126 funds in the research. The U.K. is the next highest with 26 funds, followed by Canada (19), Australia (16), Japan (14) and the Netherlands (13).

“The continuing growth of most pension markets is genuinely encouraging, despite the many remaining structural issues. During 2013, we dared to believe that a number of positive developments presaged the end of the global financial crisis, and as it turned out, the global economic recovery has continued to gain momentum into 2014. It is noteworthy that the 13 major pension markets are now more than double the size they were 10 years ago, and pension assets now amount to around 78% of global GDP, substantially higher than the 61% recorded in 2008,” said Ford.

Sovereign funds1 continue to feature strongly in the ranking, with 27 of them accounting for 28% of assets and totaling around $4.2 trillion. The 113 public sector funds in the research had assets of $5.8 trillion in 2013 and account for 39% of the total. Private sector industry funds (61) and corporate funds (99) account for 14% and 19%, respectively, of assets in the research.

“Investors have been justifiably preoccupied with managing risk for a number of years, but now are increasingly searching for elusive yield. This competition will become fiercer in the face of expected anemic growth and benign global inflationary conditions, and the situation will increasingly polarize winners and losers. Most funds are unlikely to get adequate returns from the market in the coming year and will need to work hard in ‘added-value spaces’ to find the couple of extra percent annually they need. Investors will need to be well organized to deliver this, and it will likely involve a substantial shift in focus away from security selection in equities and toward capturing returns from alternative markets and strategies,” said Ford.

1As established by national authorities for the meeting of pension liabilities — we acknowledge there are many other state-sponsored funds established, and we have attempted to restrict this research to funds specifically sponsored by national authorities.

Top 20 pension funds

(US$ millions)

Rank   Fund   Country   Region   2013 AUM  
1. Government Pension Investment Japan Asia Pacific $1,221,501
2. Government Pension Fund Norway Europe $858,469
3. ABP Netherlands Europe $415,657
4. National Pension South Korea Asia Pacific $405,521
5. Federal Retirement Thrift U.S. North America $375,088
6. California Public Employees U.S. North America $273,066
7. Canada Pension Canada North America $206,173 1
8. National Social Security China Asia Pacific $205,168
9. Central Provident Fund Singapore Asia Pacific $200,376
10. PFZW Netherlands Europe $196,933 1
11. Employees Provident Fund Malaysia Asia Pacific $182,216
12. Local Government Officials Japan Asia Pacific $179,820 1
13. California State Teachers U.S. North America $172,424
14. New York State Common U.S. North America $164,008
15. Florida State Board U.S. North America $146,266
16. New York City Retirement U.S. North America $143,925
17. Ontario Teachers Canada North America $132,445
18. Texas Teachers U.S. North America $119,706
19. GEPF South Africa Other $117,681 2
20. Pension Fund Association Japan Asia Pacific $117,636
              1   As of March 31, 2014
2 As of March 31, 2013

Top Sovereign pension funds

(US$ millions)

Rank   Fund   Country   Region   2013 AUM  
1. Government Pension Investment Japan Asia Pacific $1,221,501
2. Government Pension Fund Norway Europe $858,469
3. National Pension South Korea Asia Pacific $405,521
4. Canada Pension Canada North America $206,173


5. National Social Security China Asia Pacific $205,168
6. Central Provident Fund Singapore Asia Pacific $200,376
7. Employees Provident Fund Malaysia Asia Pacific $182,216
8. GEPF South Africa Other $117,681


9. National Wealth Fund Russia Europe $88,179 3
10. Future Fund Australia Asia Pacific $86,196
11. Fondo de Reserva Seguridad Spain Europe $74,106
12. Employees' Provident India Asia Pacific $70,573 2
13. Labor Pension Fund Taiwan Asia Pacific $59,756
14. Public Institute for Social Security Kuwait Other $56,871 1, 4
15. FRR France Europe $50,054
16. AP Fonden 3 Sweden Europe $41,441
17. AP Fonden 2 Sweden Europe $40,434
18. AP Fonden 4 Sweden Europe $39,785
19. AP Fonden 1 Sweden Europe $38,692
20. National Pensions Reserve Ireland Europe $27,854 1
21. Zilverfond Belgium Europe $27,527
22. AP Fonden 7 Sweden Europe $26,670
23. State Pension Finland Europe $22,524
24. FEFSS Portugal Europe $16,132
25. Fonds de Comp./Securite Sociale Luxembourg Europe $16,086
26. New Zealand Superannuation New Zealand Asia Pacific $14,205 5
27. Social Insurance Funds Vietnam Asia Pacific $13,761
              1   As of March 31, 2014
2 As of March 31, 2013
3 As of January 1, 2014
4 Estimate
5 As of June 30, 2013

Towers Watson Investment

Towers Watson’s Investment business is focused on creating financial value for institutional investors through its expertise in risk assessment, strategic asset allocation, fiduciary management and investment manager selection. It has over 800 associates worldwide, assets under advisory of over $2 trillion and over $65 billion of assets under management.

About Towers Watson

Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has more than 14,000 associates around the world and is located on the web at


Towers Watson
Media Contacts:
Binoli Savani, +1 703 258 7648
Ed Emerman, +1 609 275 5162


Towers Watson
Media Contacts:
Binoli Savani, +1 703 258 7648
Ed Emerman, +1 609 275 5162