GLOBAL - Institutional pension fund assets in the 11 major markets more than doubled in the last ten years, and now constitute 81% of their GDP, Watson Wyatt has found.
The consultant's global pension study found assets had increased at a compound annual rate of 7.5% and now totalled US$23.3trn. Despite the encouraging growth, Watson Wyatt global investment consulting head Roger Urwin cautioned liabilities had continued to increase due to mortality improvement and lower long-term bond yields.
"So despite improvements, it is still too early to characterise the global balance sheet as strong,” said Urwin.
Of the 11 markets analysed in the study, Australia (14.6%) and Ireland (13%) had the highest annual growth rate in pension assets.
Conversely, there were worrying signs for Germany (3.8%) and Japan (4.7%), which not only recorded the lowest growth rates but were the only two nations not to double their pension fund assets in local currency terms in the last 10 years.
The US was by far the largest pension market, accounting for around 60% of total pension assets among the group. Japan and UK remained second and third respectively, although the UK did make ground on Japan over the decade.
The 11 countries included in the survey were: Australia, Canada, France, Germany, Hong Kong, Ireland, Japan, Netherlands, Switzerland, the UK and the US.
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