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Laxman Pai, Opalesque Asia: The world's 300 largest pension funds have seen their assets fall by the largest amount seen in 20 years, according to WTW's Thinking Ahead Institute (TAI).
The 2023 edition of the Global Top 300 Pension Funds index found there was a 12.9% overall drop in assets in 2022, equivalent to US$20.6 trillion - a large change from the 8.9% growth seen in 2021.
The thinktank said that this represented a "sharp correction" compared to the 8.9 percent increase in the previous year when assets under management reached USD 23.6 trillion.
The latest drop is also greater than the 12.6% decline in 2008, at the time of the global financial crisis. Until now, the 2008 fall had been the fastest annual decline recorded in the 20 years of the study.
According to the study, the U.K. and Japan had the largest number of pension funds falling out of the top 300 globally. The U.K. gilts crisis of September 2022 and the ensuing market instability were significant contributing factors, as was the continuing shift from defined benefit pensions to smaller defined contribution plans.
In 2022, sovereign and public sector pension funds accounted for 152 funds in the top 300, representing 70.9% of total assets. Sovereign pension funds accounted for $6.2 trillion in assets, while sovereign wealth funds totaled $11.6 trillion, said TAI.
Meanwhile, sovereign wealth funds' assets grew by 13.9% during 2022, compared with a decrease of 10.6% for the sovereign p...................... To view our full article Click here
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