Global pension assets approach $85t after 2023

Global pension assets have risen 11 per cent to reach US$55.7 trillion ($84.9 trillion) in 2023, according to the Thinking Ahead Institute’s latest Global Pension Assets Study. 

The return to growth during 2023 is largely the result of stronger capital market performance throughout the year, the study said, following a much more negative impact from markets in the correction of 2022. 

The TAI estimates that the (USD-measured) return for a reference portfolio of 60 per cent global equities and 40 per cent global bonds, stood at 16.6 per cent in the twelve months to December 2023. 

In terms of allocations, since the survey’s inception in 2003, equity allocations have shrunk from 51 per cent to stand at 42 per cent in 2023. Meanwhile, allocation to bonds among global pension funds remains stable at an average of 36 per cent – the same in 2023 as in 2003. 

The Australian pension market has the highest allocation to equities (51 per cent) and lowest allocation to bonds (15 per cent) of the largest seven pension markets, reflective of the domination of the defined contribution approach in the Australian market.