Global Retirement Assets Reach $58.5T, Led by Defined Contribution Growth

Global retirement assets rose by 4.9% in 2024, reaching $58.5 trillion, according to new research from WTW’s Thinking Ahead Institute. At the end of 2023, pension assets were valued at $55.7 trillion.

The U.S. accounted for 65% of all global pension assets. When factoring in Japan, Canada and the U.K., the four countries with the most assets accounted for 82% of all global retirement assets globally.

Growth across most of the large markets was driven by defined contribution plans, which in many countries made up a majority of retirement assets. When adding Australia, the Netherlands and Switzerland to the four largest retirement asset markets, defined contribution accounts made up 59% of total assets in those seven countries.

Traditional pension funds are usually defined benefit plans, in which the retiree receives an income for life based on their tenure with an employer and their salary level. Defined contribution plans provide a retiree the assets accumulated from their own and their employer’s contributions, plus investment earnings.

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WTW attributed the growth in DC assets in 2024 to defined contribution plans’ higher exposure to growth assets. Defined contribution assets have grown by an average of 6.7% per year since 2014, while defined benefit assets have grown at 2.1% per year, according to WTW.

“The rise of DC becomes more pronounced every year that we conduct this study,” said Jessica Gao, director at the Thinking Ahead Institute, in a statement. “While global pension assets continue to reach new record levels, it is those markets with larger pools of DC assets that are the main engine behind this continued growth.”

Growth does vary by country. In Australia, with its mandatory superannuation system, pension assets have grown 110% since 2014 and 500% over the past 20 years. WTW expects Australia to have the world’s second-largest pension market by 2030 if this growth trajectory continues.

U.S. pension assets have grown by 75% since 2014. Like Australia, a majority of U.S. pension assets are in DC plans. In Australia, this figure is 89%, while in the U.S., 69% of assets are in DC plans.

The U.K., with only 27% of assets held in defined contribution plans, was the only one of the seven countries with the most retirement assets in which those assets declined over the past year, shrinking 0.7%.

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Tags: Jessica Gao, Pensions, Thinking Ahead Institute, WTW, WTW Thinking Ahead Institute

In addition to the pension risk transfer stake, the Japanese insurer will acquire all of L&G’s U.S. protection business in a total $2.3 billion deal.

Legal & General Group PLC announced Friday the sale of its U.S. insurance business to Japanese annuity firm Meiji Yasuda Life Insurance Co. in a $2.3 billion deal that includes the firm’s protection business and a percentage of its U.S. pension risk transfer business.

Meiji Yasuda will wholly acquire Legal & General’s traditional U.S. insurance business and will take a 20% stake in its U.S. pension risk transfer business. In addition, Meiji Yasuda will acquire a 5% stake in Legal & General.

Approximately 400 million pounds ($497.51 million) from the proceeds of the transaction will be invested in Legal & General’s U.S. PRT business, according to the announcement. The two firms will partner in asset management by outsourcing pension risk transfer and protection assets to Legal & General.

“This strategic partnership brings together two highly complementary global businesses, with a shared ambition for growth, and will enable us to capitalize on the large market opportunities in US Pension Risk Transfer while driving scale and profitability in global asset management,” said Legal & General Group CEO António Simões in a statement.

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The two firms will also establish a long-term partnership in global private assets, including significant co-investment in Legal & General’s private asset capabilities, which include real estate equity, private credit, infrastructure equity and venture capital.

The transaction is expected to close at the end of 2025, pending regulatory approval. According to a December 2024 report from Legal & General, the firm expects its largest recorded PRT volume in the U.S. and Canada this year. The firm is expected to write 10.5 billion pounds of PRT volume in the U.K. and another 2.1 billion pounds internationally, including the U.S. market.

“This is an exciting milestone for the US pension risk transfer business. The strategic partnership with Meiji Yasuda combines the strength and experience of two industry-leading companies to support our continued growth in the U.S. PRT market,” said George Palms, CEO of Legal & General Retirement America, the firm’s U.S. PRT division, in a statement. “This partnership marks a new chapter for our organization, and our priority remains steadfast: to ensure a secure retirement for our annuitants and provide exceptional service to our clients.”

Insurance firm Nationwide expected the U.S. PRT market to have exceeded $50 billion in 2024, with continued momentum in 2025.

Headquartered in Tokyo, Meiji Yasuda is the oldest and one of the major life insurance providers in Japan. The company also has insurance operations in the U.S., Poland, Thailand and China, deal materials stated.

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