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The world’s largest retirement funds recorded double-digit growth in 2017, with the latest survey by Pensions & Investments and the Thinking Ahead Institute showing assets of the 300 largest retirement funds growing 15.1% to hit $18.1 trillion.
By comparison, assets grew 6.1% in 2016.
And as global equity markets produced a 23.97% gain, according to the MSCI All Country World index, the top 20 retirement funds recorded equally impressive growth, with assets increasing 17.4% for the year ended Dec. 31, to $15.7 trillion. That compared with 7.1% growth for the top 20 funds in 2016.
The World 300 now account for about 43.8% of total retirement assets in the Thinking Ahead Institute’s Global Pension Assets Study 2018, up slightly from 43% at year-end 2016.
Willis Towers Watson Investments’ Thinking Ahead Group is the executive team to the firm’s Thinking Ahead Institute — a global, non-profit group that seeks collaboration and change in the investment industry for the benefit of savers.
“When you think of capital markets forging ahead, we’ve had good five-year figures, the (global financial crisis) is dropping out,” said Roger Urwin, global head of investment content in London at Willis Towers Watson PLC and part of the research team for the institute.
“We’ve found (the 300 funds are) keeping pace with that growth, not growing faster than capital markets. That’s because, while we did get a fair amount of contributions, they had to pay out a lot. That’s a factor increasingly keeping their growth in single digits. But a few funds have double-digit growth — in particular one or two of the emerging market funds.”
For the first time, an India-based retirement fund has made its way into the top 20 largest funds, with the Employees’ Provident Fund Organization, New Delhi, placing at number 19 in the ranking, with $134.3 billion in assets. In dollar terms the fund’s assets grew 22% for the year, propelling it from 21st place in the year-earlier ranking.
Four other emerging markets-based funds retained their places in the top 20:
- South Korea’s National Pension Service, Seoul moved into third place, up from fourth a year ago, with 26.1% growth in dollar terms to $582.9 billion.
- National Council for Social Security Fund, Beijing, saw assets grow 31% in dollar terms to $456.9 billion. It stayed in sixth place in the ranking.
- Malaysia’s Employees Provident Fund, Kuala Lumpur, moved up one place to 14th, as assets grew 21% to $200.3 billion.
- The Government Employees Pension Fund, Pretoria, South Africa saw asset growth of 12.4% in dollar terms to $133.9 billion. It dropped one place in the ranking to 20th.