01 February 2010
Published in: Investment risk
Global pension funds rebound in 2009
Global institutional pension fund assets in the 13 major markets increased by 15% during 2009, from $20 trillion to over $23 trillion, according to Towers Watson's Global Pension Assets Study released today.
This is in sharp contrast to a 21% fall in asset values during 2008, and brought assets back to 2006 levels. The study also reveals that the global pensions balance sheet measured by asset values over liability values using sovereign bonds to discount liabilities strengthened by around 10% in 2009, compared to a 25% fall in 2008.
According to the study, pension assets now amount to 70% of the average global GDP, down from 76% a decade earlier, but substantially higher than the equivalent figure in 2008 of 58%.
Roger Urwin, global head of investment content at Towers Watson, said: "The global financial crisis was a huge wake-up call and problems of poor systemic design in the industry point to increased likelihood of further periods of financial distress in future."
Despite losing market share in the past ten years, the US, Japan and the UK remained the largest pension markets in the world, accounting for 57%, 14% and 8% respectively of total pension global fund assets.