The value of pension assets in 11 countries has more than doubled over the past decade to US$23.2 trillion, according to a study by Watson Wyatt.
Pension assets in Canada, the United States, Japan, the United Kingdom, the Netherlands, Australia, Switzerland, Germany, France, Ireland and Hong Kong have grown their pension assets over the last 10 years at a compound annual rate of 7.5%, leading to pension asset pools of 81% of GDP.
As at the end of 2006, defined benefit(DB)assets were 58% of the total, while defined contribution(DC)assets were 42%.
DC assets have continued to grow faster than DB assets principally because of their higher contribution flows. Over the past decade, the average growth of DC is 9.8% per annum compared and 5.5% per annum for DB.
In Canada, the DB/DC asset split at the end of 1997 was 90/10. In 2001, it was 82/18 and at the end of last year, it was virtually unchanged at 81/19.
The most dramatic shifts in the DB/DC asset split have been in Australia and the U.K. In Australia, the asset split was 27/73 in 1997, 17/83 in 2001, and 9/91 last year. The split in the United Kingdom was 96/4 in 1997, 92/8 in 2001 and 67/33 in 2006.
For a PDF version of this study from Watson Wyatt’s website, click here.
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