Summary

The Global Pension Funds Industry in terms of assets under management value is expected to grow from USD 76.30 trillion in 2024 to USD 119.03 trillion by 2029, at a CAGR of 5.40% during the forecast period (2024-2029).

Pension fund schemes invest with a long-term investment perspective in line with the duration of their liabilities. Pension funds are adapting their investment strategies to succeed in the current complex and demanding environment.

The COVID-19 pandemic had a significant impact on investment markets, government revenues, and the outlook for public pension plans. Despite vaccine development, the effect of the pandemic remained highly uncertain, resulting in varying forecasts. At different times, different parts of the country experienced varying degrees of pandemic severity, and the economic impact of the pandemic on industries varied greatly.

Traditionally, pension funds are invested in bonds and equities with long-term investment horizons. Given the market volatility, they diversified their portfolios by allocating funds to alternatives like hedge funds, private equity, real estate, and others. Recent years have witnessed intense pension reform efforts in countries around the world, often involving increased use of funded pension programs managed by the private sector. These funded arrangements are expected to play an increasingly important role in delivering retirement income in many countries. Privately managed pension assets may play an increasing role in financial markets, notably as a source of long-term savings.

Pension Fund Market Trends

Distributed Contribution Plans are Settling as a Dominant Global Model

In 2021, the total defined contribution (DC) assets across the aggregate of the six largest pension markets in the world exceeded defined benefit (DB) assets for the first time. Over the decade to 2021, DC assets continued to grow at a faster rate than DB (8.4% pa vs. 4.8% pa), reflecting increased member coverage and higher contributions in some markets.

Along with a rise in the distributed contribution assets, there are challenges like member engagement for employers. Targeted engagement provides better insights but faces challenges in execution. Advances in technology are opening up new possibilities for customization, changing the nature of member interactions, and re-setting member expectations. The future of DC is anticipated to be hyper-customized, with an increased focus on individual participants, but employers may need to improve governance to embrace this.

Key Trends in Asset Allocation of Pension Funds

The asset allocation to real estate, private equity, and infrastructure in the 20-year period grew from 6% to 23%. Alternatives have been attractive for return reasons, offsetting their governance difficulties.

A rise in allocations to private markets and other alternatives at the expense of equities and bonds has been observed, reflecting the demand for risk diversification. Investors continue looking for innovative ways to evolve their mandates to manage the agency, measurement, integration, and complexity challenges of private markets.

Pension Fund Industry Overview

The report includes an overview of the largest pension funds and a few corporate funds operating pension schemes worldwide. Some of the major players, such as Social Security Trust Funds, AT&T Corporate Pension Fund, and California Public Employees' Retirement System, are dominating the market studied in terms of asset size and are discussed in detail in the report.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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Table of Contents

1 INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Market

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET DYNAMICS
4.1 Market Overview
4.1.1 Features and Coverage of Pension Plans Landscape
4.1.2 Assets Under Management by Pension Funds and Growth Rates, Over the Years
4.1.3 Impact of Pension Assets to the Economies Worldwide
4.1.4 Distribution of Pension Assets by Size Segment
4.1.5 Investment Patterns of Pension Funds
4.2 Role of Pension Funds in Achieving Financial Stability
4.2.1 Interconnectedness of Pension funds and Other Financial Intermediaries
4.2.2 Role of Pension Funds in Credit Intermediation and Lending Activities
4.3 Market Drivers
4.4 Market Restraints
4.5 Porter's Five Forces Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Impact of Regulatory and Legislative Landscape on Pension Funds
4.6.1 Portfolio Limits on Pension Fund Investment in Selected Asset Categories
4.6.2 Portfolio Limits on Pension Fund Investment in Selected Foreign Asset Categories
4.6.3 Recent Changes to the Pension Fund Investment Regulations
4.7 Impact of COVID-19 on Fund Schemes

5 MARKET SEGMENTATION
5.1 By Plan Type
5.1.1 Distributed Contribution
5.1.2 Distributed Benefit
5.1.3 Reserved Fund
5.1.4 Hybrid
5.2 By Geography
5.2.1 North America
5.2.1.1 United States
5.2.1.2 Canada
5.2.1.3 Rest of North America
5.2.2 Europe
5.2.2.1 United Kingdom
5.2.2.2 Switzerland
5.2.2.3 Netherlands
5.2.2.4 Rest of Europe
5.2.3 Asia-Pacific
5.2.3.1 Australia
5.2.3.2 Japan
5.2.3.3 Rest of Asia-Pacific
5.2.4 Rest of the World

6 COMPETITIVE LANDSCAPE
6.1 Overview (Market Concentration and Major Players)
6.2 Fund Profiles
6.2.1 Social Security Trust Funds
6.2.2 National RailRoad Retirement Investment Trust
6.2.3 California Public Employees' Retirement System
6.2.4 AT&T Corporate Pension Fund
6.2.5 1199SEIU Pension and Retirement Funds
6.2.6 National Eletrical Benefit Fund
6.2.7 Government Pension Investment Fund Japan
6.2.8 Caisse des Depots
6.2.9 Military Retirement Fund
6.2.10 Federal Retirement Thrift Investment Board*

7 MARKET OPPORTUNITIES AND FUTURE TRENDS

8 DISCLAIMER AND ABOUT US