Home > News > Pensions > Pension Assets in Largest Markets Climbed Almost 11% in 2023
Pensions

Pension Assets in Largest Markets Climbed Almost 11% in 2023

AUM held by institutional asset owners reached $170 trillion last year, according to WTW’s Thinking Ahead Institute.

By Matthew Toledo



In 2023, the assets of pension systems in the 22 largest pension markets increased to $55.7 trillion, representing a 10.96% increase from $50.2 trillion at the end of 2022, according to WTW’s Thinking Ahead Institute’s 2024 global pension assets study.

The study included Australia, Brazil, Canada, Chile, China, Finland, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, Netherlands, South Africa, South Korea, Spain, Switzerland, the U.K. and the U.S.

The total AUM of institutional asset owners, not just pensions, reached $170 trillion globally. Of this figure, pension funds manage a total of $59.7 trillion, including the $55.7 trillion in the largest markets; insurance funds manage $35.7 trillion, mutual funds manage $60.1 trillion, sovereign wealth funds manage $12.3 trillion and endowments and foundations manage $2.1 trillion.

Largest Pension Markets

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

The U.S. continues to be the largest pension market in the study, making up 64% of all assets held in the 22 largest. The U.S. was followed by Japan and the U.K., which held 6.1% and 5.8%, respectively, of the pension assets in the that group of markets.

 The largest pension markets, according to the report.

  1. United States – $35.6 trillion
  2. Japan – $3.385 trillion
  3. United Kingdom – $3.206 trillion
  4. Canada – $3.105 trillion
  5. Australia – $2.448 trillion
  6. Netherlands – $1.737 trillion
  7. Switzerland – $1.361 trillion
  8. South Korea – $1.102 trillion
  9. Germany – $596 billion
  10. China – $423 billion
  11. Mexico – $381 billion
  12. Finland – $284 billion
  13. Malaysia – $278 billion
  14. Brazil – $272 billion
  15. Italy – $243 billion
  16. South Africa – $243 billion
  17. India – $241 billion
  18. Hong Kong – $216 billion
  19. Chile – $199 billion
  20. Ireland – $172 billion
  21. France – $155 billion
  22. Spain – $43 billion

“Pension assets are growing once again—just as the importance of the pensions industry itself consistently increases in a world facing new challenges and opportunities for future prosperity. Growth is back on the agenda,” said Jessica Gao, the Thinking Ahead Institute’s director of research, in the report. “This global growth is not yet rapid, and pension assets remain behind their pre-2022 position, but it is far better than the experience a year before. Inflation has moderated, and as a result financial markets have remained supported by interest rates which appear also to have peaked, at least for now, in most countries.”

Related Stories:

Bonds Should Climb Nicely in 2024, WTW Predicts

World’s Largest Asset Managers Lost $18T in 2022, According to WTW

Global Pension Assets Tumbled 17% in 2022, Worst Fall Since 2008

Tags: , ,

Home > News > Pensions > CalSTRS Reports Sustainability Progress
Pensions

CalSTRS Reports Sustainability Progress

The system expects to reach full funding by 2046 and has taken steps on its path to net zero.

By Matt Toledo



The California State Teachers’ Retirement System has released its 10th annual sustainability report, for the 2022 to 2023 fiscal year, highlighting the $325.9 billion pension fund’s organizational sustainability and future sustainability goals.

As part of the fund’s strategic plan covering 2022 through 2025, CalSTRS developed a sustainability road map to “advance organizational sustainability.” So far, the fund reported having completed plans to update its sustainability measures using expanded standards and frameworks. The fund accomplished its goal of reporting on its enterprise greenhouse gas emissions.

Plans are in progress to seek reduction opportunities for enterprise greenhouse gas emissions and to develop sustainability education for CalSTRS employees.

Push to Fully Funded Status

For more stories like this, sign up for the CIO Alert newsletter.

In its report, released Monday, CalSTRS noted that the fund’s beneficiaries are not only living longer than the average American, but they are living longer than beneficiaries of other pension funds. The fund stated that CalSTRS will be able to continue to provide benefits to last through its beneficiaries’ retirements.

The fund has 1 million beneficiaries, with $18.2 billion in benefits paid out to members in fiscal 2023. To meet the goal of continuing to grow the pension’s funded status, it adopted a funding plan in 2014.

That plan was to reach fully funded status by 2046, and CalSTRS noted that it is ahead of schedule. When the plan was adopted, CalSTRS projections called for a funded status of 67.5% by June 30, 2022, but as of that date’s actual variation, CalSTRS’ funded status sat at 74.4%.

“The funding plan set a measured schedule of contribution rate increases for members, employers and the state with the goal of achieving full funding by 2046,” CalSTRS officials wrote in the report. “The plan also provided the board with limited authority to adjust rates to help keep the funding plan on schedule.”

CalSTRS projections assume a 7% annual return and payroll growth of 3.5%, noting that a period of low returns could negatively impact future funded status levels. The fund achieved a 6.3% return in fiscal 2023, below its assumed annual rate of return.

Net Zero Commitment

In 2021, CalSTRS adopted a path to net zero plan, seeking to achieve a net zero portfolio by 2050, which means that greenhouse gas emissions from companies in the fund’s portfolio would be offset completely.

In the 2022 to 2023 fiscal year, the fund reported the following accomplishments in its plans to manage and reduce portfolio emissions, influence a global shift to a net-zero economy and increase investments to low-carbon solutions:

  • Reallocated capital within the global equity portfolio to reduce greenhouse gas emissions by approximately 14%;
  • Integrated climate scenarios into its asset-liability modeling framework using the Network for Greening the Financial System to help assess risks of the low-carbon transition;
  • Escalated efforts to hold global companies accountable for failing to address and disclose climate change risks by voting against 2,035 boards of directors in the 2023 proxy season;
  • Approved a plan that aims to reduce emissions in the corporate credit portion of the fixed-income portfolio by 12% while preserving expected returns; and
  • Deployed more than $1.3 billion into a dedicated low-carbon solutions private assets portfolio managed by its sustainable investment and stewardship strategies unit.

Related Stories:

Public Equities Buoy CalSTRS’ 6.3% Investment Return for Fiscal 2023

CalSTRS Cites Funding Status, Net Zero Progress, and DEI in Sustainability Report

CalSTRS Moves to Lower Holdings of Carbon Emitters

«