Global Pension Assets Hit Record High in 2024

Global pension assets grew 4.9% year-on-year in 2024, reaching a record high of $58.5 trillion, driven by pension schemes shifting to alternative investments and growth in defined contribution (DC) markets.

The Thinking Ahead Institute’s Global Pension Assets Study found that global pension assets increased from $55.7 trillion at the end of 2023, marking a continued recovery after a sharp decline in 2022.

The rise in assets comes as pension schemes are increasingly turning to alternative investments, such as private equity, property, and hedge funds, and more recently private debt and infrastructure, to diversify their portfolios and boost returns.

Strategists noted that these alternatives offer the potential for higher returns and reduced correlation with traditional assets like equities and bonds, enhancing overall portfolio robustness.

Jessica Gao, director at the Thinking Ahead Institute said: “A key trend that we have observed over the last few decades is the rotation from equities into alternative assets, as pension schemes have turned to private equity, property, and hedge funds, to diversify their portfolios and boost returns.”

The report also attributed the nearly 5% rise in global pension assets to growth in the largest DC markets.

In the seven biggest global pension markets — the US, Japan, Canada, the UK, Australia, the Netherlands, and Switzerland — DC now represents 59% of total assets, up from just 40% in 2004.

This shift is being driven by DC schemes’ higher exposure to growth assets, which has seen DC assets grow by 6.7% per year since 2014, while defined benefit (DB) assets grew at a slower pace of 2.1% per year, according to the report.

Gao added: “The rise of DC becomes more pronounced every year that we conduct this study. While global pension assets continue to reach new record levels, it is those markets with larger pools of DC assets that are the main engine behind this continued growth.”