Global pensions assets rose by 4.9 per cent as of December 2024, reaching a record US$58.5 trillion, led by growth in the largest defined contribution pension markets, according to a report by WTW’s Thinking Ahead Institute.

Indeed, it found among the seven largest pension markets globally — Canada, the U.S., the U.K., the Netherlands, Switzerland, Japan and Australia — DC plans now account for more than half (59 per cent) of total assets compared with just 40 per cent in 2004. This shift is primarily driven by DC plans’ higher exposure to growth assets, which has seen their assets grow by 6.7 per cent annually since 2014, while defined benefit assets have grown at a slower pace of 2.1 per cent per year.

Read: Global pension assets up 11% in 2023: report

Since 2014, the size of Australian pension assets has grown by 110 per cent in local currency and the size of U.S. pension assets has grown by 75 per cent, with both markets skewing substantially toward DC pension funds (89 per cent and 69 per cent, respectively).

The U.S. remains the biggest pension market by far, responsible for two-thirds (65 per cent) share of global pension assets. When combined with the next three largest pension markets — Japan, Canada, and the U.K. — these four regions equate to 82 per cent of all global pension assets.

Notably, the Australian market increased by nearly 500 per cent over the past 20 years, putting it on track to become the second-largest pension market globally by 2030 should it maintain its current growth trajectory.

Read: Canada has third largest share of global pension wealth for the first time: report

In terms of growth rates in local currency among the seven largest markets, the U.K. was the only country to exhibit negative annual growth over the past year, at negative 0.7 per cent, as well as over the past 10 years, with its global share of pension assets declining from 8.8 per cent in 2014 to 5.4 per cent in 2024.

U.S. equities achieved a total return exceeding 20 per cent for the second consecutive year, with
technology-oriented stocks leading the market.

“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,” said Jessica Gao, director of WTW’s Thinking Ahead Institute, in a press release. “As the size of these asset pools continues to increase, we are seeing increased influence by governments toward pension funds, primarily through regulation, which has expanded in line with both the size and growing significance of pensions in society. This has been particularly evident in countries such as Canada, Australia and the U.K.”

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