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Press Release

Top pension fund assets rise strongly despite pandemic uncertainty

September 7, 2021


ARLINGTON, VA, September 7, 2021 — Assets under management (AUM) of the world’s top 300 pension funds increased by 11.5% to a total of US$21.7 trillion in 2020, according to the annual research conducted by the Thinking Ahead Institute. The research highlights high-level trends in the pension funds industry and provides information on how the characteristics of these funds have changed.

“Overall, the world’s largest pension funds grew strongly in 2020, yet the pandemic has also been a stark reminder of how the world is more interconnected and uncertain today than ever before,” said Marisa Hall, co-head of the Thinking Ahead Institute. “Pension fund boards are increasingly focused on managing many of the headwinds that have arisen from a 'new normal' of lower-for-longer interest rates, which has prompted concerns around solvency and led some schemes to increasingly stretch their risk budgets in order to meet return targets. Additionally, managing rising ESG [environment, social and governance] expectations have created their own set of challenges and opportunities.

“As a result,” continued Hall, “pension fund boards’ agendas have become more complex and demanding than at any previous time. While some larger funds use best-practice governance to retain a strategic focus in the face of this complexity and explore more dynamic investment models, such as total portfolio thinking, other schemes are using this as an opportunity to review their governance models to ensure they remain sufficiently robust.

“The shift in focus to meet the investment challenges of tomorrow — such as achieving net-zero targets and ensuring real-world impacts — is prompting an increasing number of pension fund boards to adopt a more holistic and agile approach as they revamp their people, investment and business models. Boards that are successfully managing this transition have employed the power of technology, governance and culture ingeniously. Other pension fund boards are taking notice.”

In 2020, North America remains the largest region in terms of AUM and number of funds, accounting for 41.7% of all assets in the study, followed by Asia Pacific (27.5%) and Europe (27.5%). The Asia Pacific region experienced the largest annualized growth rate over the past five years at 9.9%. Europe and North America had annualized growth rates of 7.8% and 7%, respectively, while Latin American and African funds’ AUM increased 5.7% during the same period.

Overall, the U.S. continues to have the largest number of funds in the top 300 ranking (138), followed by the U.K. (23), Canada (18), Australia (16) and Japan (14). A total of 34 new funds entered the top 300 in the past five years, with the U.S. contributing the greatest net number of new funds (seven) — having had 15 funds leave the ranking and 22 join. In contrast, the U.K. had the highest net loss of funds (four) during the same period as defined benefit (DB) schemes in the U.K. continue to mature.

Among the top 300 funds, DB fund assets continue to dominate at 63.4% of the total AUM; however, the share of DB fund assets has been declining modestly over the years, as defined contribution (DC) funds, reserve funds and hybrid fund assets are slowly gaining traction.

DB schemes dominate in North America and Asia Pacific where they represent 73.7% and 64.7%, respectively. To a smaller degree, DB schemes also account for a majority of assets in Europe (52%), whereas DC plans dominate in other regions accounting for 72.5% of assets, particularly in Latin American countries.

According to the research, sovereign and public sector pension funds account for 68% of the total AUM in the research, with 141 funds of this type in the top 300. Corporate pension funds come in second, making up 17% of total AUM (with 101 funds); and finally, private independent funds account for 15% of total AUM with 58 funds.

The research also shows that the top 20 pension funds’ AUM — which constitute 41.8% of the total — grew by 14.6% in 2020, the second highest annual growth rate since 2004. This translates into a compound annual growth rate during the past five years of 8.9% for the top 20 and 7.9% for the top 300.

The top 20 fund assets are predominantly invested in equities (46.6%) followed by fixed income (36.3%) and alternatives and cash (17.1%) — on a weighted average basis. These funds have, in aggregate, slowly increased their allocation to alternatives during the past few years in order to meet return-target goals.

One new entrant in the top 20 funds in 2020, the Russian National Wealth Fund, moved from 25 to 17 in the ranking, replacing the Texas Teachers pension fund from the U.S., which dropped to 21 in the ranking.

Top 20 pension funds (USD millions)

Top 20 pension funds (USD millions)
Rank Fund Market Total Assets
1 Government Pension Investment Japan $1,719,987
2 Government Pension Fund Norway $1,305,920
3 National Pension South Korea $765,446
4 Federal Retirement Thrift U.S. $651,124
5 ABP Netherlands $607,367
6 National Social Security China $448,4271
7 California Public Employees U.S. $426,247
8 Canada Pension Canada $390,5032
9 Central Provident Fund Singapore $349,787
10 PFZW Netherlands $306,8932
11 California State Teachers U.S. $259,246
12 Employees Provident Fund Malaysia $248,203
13 Local Government Officials Japan $248,094
14 New York State Common U.S. $226,400
15 New York City Retirement U.S. $225,450
16 Employees' Provident India $193,8011
17 National Wealth Fund Russia $183,0023
18 Florida State Board U.S. $180,221
19 ATP Denmark $176,606
20 Ontario Teachers Canada $173,741

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 50 members around the world and is an outgrowth of Willis Towers Watson Investments’ Thinking Ahead Group, which was set up in 2002.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.


1 Estimate

2 As of March 31, 2021

3 As of Jan. 1, 2021

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