The world’s 20 largest pension funds

Compared to all pension funds of any size, the 300 largest pension funds in the world now represent 43% of global pension assets (up from 41.1% in 2021), according to the annual Global Pension Assets Study by the Thinking Ahead Institute, which estimates the assets of global pension funds in the 22 main pension markets.

The 300 largest pension funds in the world have seen a drop in their assets for the first time since 2018. This decline is on par with the one observed in 2008, occurring at a rate that has only happened twice in the twenty-year history of this annual study. By the end of 2022, the combined assets of the 300 largest pension funds in the world decreased by 12.9%, reaching a total of 20.6 trillion dollars compared to the 23.6 trillion at the end of 2021. This represents a sharp correction compared to the 8.9% increase in assets managed by the 300 largest pension funds in the previous year. The latest drop is also faster than the 12.6% annual drop recorded in 2008, at a time of global financial crisis. Until now, this had been the fastest annual decline recorded in the 20 years of the study.

The Government Pension Investment Fund of Japan (GPIF) remains the largest pension fund, and tops the table with assets of 1.4 trillion dollars. It has held the top spot since 2002. Meanwhile, the Employees' Provident Fund of India joins as the only new participant among the top 20 funds of 2022.

Top 20 largest pension funds in the world (US$ millions)

The United Kingdom and Japan recorded the highest number of pension fund falls among the world's top 300. The crisis of the British "gilts" in September 2022 and the subsequent market instability were significant factors, as was the growing shift from defined benefit plans to smaller defined contribution plans.

In 2022, sovereign and public sector pension funds accounted for 152 of the top 300, representing 70.9% of total assets. Sovereign pension funds amounted to 6.2 trillion dollars in assets, while sovereign investment or "Wealth funds" (SWF) totaled 11.6 trillion dollars. The assets of sovereign investment funds grew by 13.9% during 2022, compared to the decline of 10.6% of the sovereign pension funds included in the Top 300 study of the Thinking Ahead Institute.

North America currently represents 45.6% of the assets of the world's 300 largest pension funds, while European pension funds represent 24.1% and those of Asia-Pacific 26.4%.

As for the largest ones, the assets of the 20 largest pension funds decreased by 11.8% in the last year, a slight improvement compared to the 12.9% drop observed in the set of the 300 largest funds. The 20 largest funds represented 41.5% of the assets under management (AUM) of the ranking, slightly above the 2021 share, which was 41%.

This is a story of two halves. On the one hand, a new record for the world’s major pension funds illustrates the optimism that defied a global pandemic. Yet on the other, growth is slowing and the long-term dashboard is flashing amber. Looking ahead, rising inflation and subsequent central bank action are likely to cause global growth to falter, which may in turn endanger longer term the funding status of pension funds. Pension funds are also under immense governance pressure from all sides, with a growing politicisation of ESG in some regions meeting calls for more substantial and urgent climate action. The addition of stark short-term economic pressures alongside these structural long-term changes will only add to the difficulty of balancing short-term financial resilience with long-term financial and climate sustainability.

Marisa Hall, co-head of the Thinking Ahead Institute