A new study by Towers Watson examined 13 major pension markets, totaling $27.5 trillion and accounting for 72.3 percent of the GDP of these markets. This represented a 3.9 percent increase compared to the year-end 2010 value.
According to the report, global pension assets reached a record high this year, if measured in absolute terms. Pension assets relative to GDP reached 72.3 percent in 2011, which was still below the 2007 level of 78.9 percent and below the 2010 ratio of 75.5 percent.
The U.S., Japan and the United Kingdom account for the largest pension markets, with 58.5 percent, 12.2 percent and 8.7 percent of total pension assets in the study, respectively.
Recommended For You
During the past 10 years, defined contribution assets have grown at a rate of 7.9 percent, while defined benefit assets have grown at a much lower 4.6 percent. Currently, DC assets represent 43.1 percent of total pension assets compared to 42.2 percent in 2006 and 38.3 percent in 2001. Australia, Switzerland and the U.S. have a larger proportion of DC plans, while Japan remains almost 100 percent DB.
The report also looked at asset allocation for the seven largest markets. At the end of 2011, the average global asset allocation of the seven largest markets was 37.7 percent equities, 40.1 percent bonds, 3.7 percent cash and 18.5 percent other assets, including property and alternatives. These allocations have changed since 2010. Allocations to bonds increased while allocations to equities fell. Cash remained stable and other investments suffered a slight decline.
Australia, UK and U.S. have higher allocations to equities than the rest of the top markets. Japan, the Netherlands and Switzerland have more conservative strategies, putting more into bonds and less into equities.
The report also found that 65 percent of pension assets of the largest markets are held by the private sector and 35 percent by the public sector. In the UK and Australia, the private sector holds more than 80 percent of pension assets. Canada and Japan are the only two markets where the public sector holds more pension assets than the private sector.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
