The 30 biggest pension funds in Asia Pacific grew by a combined 1% last year, even as retirement assets globally shrank by 3.4%, their first decline since the financial crisis in 2008, according to new research.

China was the standout market, posting 17.8% annualised growth in dollar terms in pension assets between 2010 and 2015, way ahead of second-ranked Norway (9.5%), found the annual pensions report by Willis Towers Watson and Pension & Investments

A contributing factor was the renminbi – the only currency in the main pension markets to have appreciated (by 0.3%) against the dollar in that five-year period.

By region, North America recorded the strongest annualised growth over five years of 5.6%, as against 3.6% for Europe, 1.3% for Asia Pacific and 3.5% globally. 

Asia Pacific increases its share

Still, the growth in Asia-Pacific funds last year boosted their share of the $14.8 trillion in assets held by the 300 biggest pension funds rose to 41.2%, up from 39.7% in 2014. The US’s share rose to 25.5% from 25.2%, while Europe’s fell to 26.0% from 27.1%.

Asia Pacific had four institutions in the top 10, namely Japan’s $1.2 trillion Government Pension Investment Fund (number 1), Korea’s $435 billion National Pension Service (4), China’s $295 billion National Social Security Fund (6) and Singapore’s $211 billion Central Provident Fund (8). (Click on figure to the left for full view.)

Top 20 pension funds
2015 rank 2014 rank Fund Market Region Assets ($m)
1 1 Government Pension Investment Japan Asia-Pacific $1,163,203
2 2 Government Pension Fund Norway Europe $865,943
3 3 Federal Retirement Thrift US North America $443,328
4 4 National Pension South Korea Asia-Pacific $435,405
5 5 ABP Netherlands Europe $384,271
6 7 National Social Security China Asia-Pacific $294,939
7 6 California Public Employees US North America $285,774
8 10 Central Provident Fund Singapore Asia-Pacific $211,373
9 8 Canada Pension Canada North America $201,871
10 9 PFZW Netherlands Europe $186,471
11 12 California State Teachers US North America $181,875
12 11 Local Government Officials Japan Asia-Pacific $176,160
13 14 New York State Common US North America $173,541
14 13 Employees Provident Fund Malaysia Asia-Pacific $161,707
15 15 New York City Retirement US North America $155,120
16 16 Florida State Board US North America $147,819
17 18 Texas Teachers US North America $125,327
18 17 Ontario Teachers Canada North America $123,985
19 20 ATP Denmark Europe $106,640
20 19 GEPF South Africa Other $103,147
    Total: Top 20     $5,927,899

* Date as of December 31 2015, except Canada Pension and PFZW (March 31 2016) and GEPF (As of March 31 2015)

Notable climbers on the list included Taiwan’s Labor Pension Fund, Labor Insurance Fund and Public Service Pension Fund, as well as Australia’s Super and First State Super, the New Zealand Superannuation Fund, India’s Employees’ Provident Fund, the Philippines’ Government Service Insurance System and Vietnam’s Social Insurance Fund. (Click on figure below for more details).

Click for full view

Naomi Denning, managing director of investments for Asia Pacific at Willis Towers Watson, said: “The continuing tides of asset rises and falls combined with increasing liabilities bears testament to how difficult it has become for funds to meet their respective missions.”

Average allocation

On average, the top 20 funds globally invested 40.8% of their assets in equities, 39.0% in fixed income and 20.3% in alternatives and cash. North American pensions have chiefly allocated to equities, while in Asia Pacific there was a greater preference for fixed income.