The world’s largest 300 pension funds saw their assets decrease by 12.9 per cent to US$20.6 trillion in 2022, down from $23.6 trillion at the end of 2021, according to a new report by WTW.

The report, which analyzed global pension fund assets across 22 major pension markets, found the largest 300 pension funds now represent 43 per cent of global pension assets, compared to 41 per cent in 2021. North America accounts for roughly 45 per cent of assets among the world’s 300 largest pension funds, followed by Asia-Pacific (26 per cent) and Europe (24 per cent).

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According to the report, Canada continued to hold the third largest share of the world’s pension wealth (roughly six per cent), behind the U.S. (39 per cent) and Japan (10 per cent). The U.S. had the most funds (146) in the top 300, while the U.K. and Japan had the largest number of pension funds fall out of the top 300. The 2022 U.K. gilt crisis and the ensuing market instability were significant contributing factors, as was the continuing shift from defined benefit pension plans to smaller defined contribution plans.

Despite negative returns, North American pension funds posted the largest annualized growth during the last five years (four per cent), followed by Asia-Pacific (two per cent) and Europe (0.7 per cent).

Sovereign and public sector pension funds accounted for 152 of the top 300 funds, representing 71 per cent of total assets. Among the top 20 pension funds, the Government Pension Investment Fund of Japan remained the world’s largest, with $1.4 trillion assets under management, followed by Norway’s Government Pension Fund ($1.3 trillion AUM) and South Korea’s National Pension ($700 billion). The Canada Pension Plan Investment Board ranked seventh with $420 billion. Meanwhile, the Employees’ Provident Fund of India was the only new entrant in the top 20 funds.

While the top 20 pension funds’ assets decreased by 11.8 per cent in the last year, they accounted for roughly 42 per cent of AUM in the total global ranking, up slightly from 41 per cent in 2021.

Read: Top global pension funds combined AUM up 8.9 per cent in 2021: report