Six Asia-based pension funds are among the world’s top 20 by size, according to the report. Their total assets under management were $3.7trn at the end of 2016, a 7% increase from the year before.
The growth rate of the six Asia pension funds outpaced the average of the top 20, which was 6.1%.
Japan’s Government Pension Investment Fund remains the largest pension fund in the world, with $1.24trn in assets, followed by Norway’s Government Pension Fund, $893bn.
Asia-Pacific largest pension funds
| Pension Fund | Country | AUM |
| Government Pension Investment Fund | Japan | $1.24trn |
| National Pension Service | South Korea | $462bn |
| National Social Security Fund | China | $349bn |
| Central Provident Fund | Singapore | $227bn |
| Pension Fund for Local Government Officials | Japan | $183bn |
| Employees Provident Fund | Malaysia | $165bn |
Data: Willis Tower Watson
The report analysed the world’s 300 largest pension funds, which together hold $15.7trn in assets out of $36.4trn, which is the total of all pension fund assets.
Globally, defined benefit plans still dominate the share of pension fund assets. They accounted for 67% of total pension assets in Asia-Pacific, 76% in North America and 53% in Europe. (Governments’ reserve funds, which guarantee pension benefits, make up a significant 32% in Europe, and a much smaller share in other regions).
Yet in the context of global assets, pension fund assets only accounted for around 19% in 2015, according to a June 2017 report by PWC.
High net worth and mass affluent individuals held 64% of the total, with insurance companies and sovereign wealth funds making up 13% and 3%, respectively.
Conservative approach
In 2016, among the top 20 funds, China’s pension plan saw the largest growth rate of AUM, 22.8%, as measured in local currency, followed by Norway’s with 17.5% growth.
Among the top 20 funds, Asia Pacific funds stand out for the most conservative approach to asset allocation. They invested, on average, 54% of their assets in bonds and 39% in equities. Those in North America allocated 47% to equities and those in in Europe 48% to equities.
Over the past five years, pension funds in Asia-Pacific grew more slowly (2.8% annualised) than their counterparts in Europe (3.1%) and North America (6.7%).
