Global pension fund assets have doubled in the last decade, with Australia’s pension assets growing by 11.6% in 2021 and seeing it described as “the most successful pensions market”.

The latest Global Pension Assets Study from Willis Towers Watson’s Thinking Ahead Institute shows global pension assets in the world’s 22 largest markets now sit at US$56 trillion. This shows year-on-year growth of 6.9% in 2021.

Interestingly, Australia has the largest growth rate of any country in the study over the past two decades at an average of 11.3% per year in USD terms. Willis Towers Watson puts this down to several factors, including the dominant defined contributions structure, its government-mandated nature and competitive institutional model.

“But Australian funds aren’t resting on their laurels, with significant change still occurring in the industry, including merger activity among all sizes of fund, and increasing internalisation of investment functions at large funds,” WTW Australia senior director, investments Martin Goss said.

“The themes Australian funds need to continue to address resonate with global issues – accountability, increasing benchmarking, collaboration, diversity and evolving risk frameworks – with increasing regulation in particular impacting behaviour with heightened sensitivity to cost and peers.”

Australia now sits in second place in terms of ratio of pension assets to GDP, overtaking Canada. The Netherlands has the highest ratio at 213% while Australia’s comes in at 172% (local currency).

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