Mordor Intelligence has published a new report on the Global Pension Funds Industry, offering a comprehensive analysis of Key trends, growth drivers, and major players in the industry.
The Global Pension Funds Industry is projected to expand from USD 80.42 trillion in assets under management in 2025 to USD 104.61 trillion by 2030, reflecting a compound annual growth rate (CAGR) of 5.4% over the forecast period (2025-2030).
Key Trends
Shift Towards Defined Contribution Plans
In 2021, assets in defined contribution (DC) plans surpassed those in defined benefit (DB) plans across the six largest pension markets globally. Over the past decade, DC assets have grown at an annual rate of 8.4%, outpacing the 4.8% growth of DB assets. This trend indicates increased member participation and higher contribution rates in certain markets. Employers are now focusing on personalized engagement strategies, leveraging technological advancements to meet evolving member expectations.
Diversification into Alternative Investments
Pension funds are increasingly allocating assets to alternatives such as real estate, private equity, and infrastructure. Over a 20-year period, allocations to these asset classes have risen from 6% to 23%. This shift aims to enhance returns and diversify risk, moving away from traditional equities and bonds. Investors are seeking innovative approaches to manage the complexities associated with private market investments.
Market Segmentation
The pension fund industry is categorized based on plan types and geographical regions:
By Plan Type:
- Defined Contribution (DC): Plans where contributions are defined, but benefits vary based on investment performance.
- Defined Benefit (DB): Plans that promise a specified monthly benefit upon retirement, typically based on salary and years of service.
- Reserved Fund: Funds set aside by employers or governments to meet future pension liabilities.
- Hybrid: Plans that combine elements of both DC and DB structures.
By Geography:
- North America: Leading the market with substantial assets under management.
- Europe: Notable markets include the United Kingdom, Switzerland, and the Netherlands.
- Asia-Pacific: Regions such as Australia and Japan are experiencing rapid growth.
- Rest of the World: Includes emerging markets with developing pension systems.
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Key Players
Prominent entities in the global pension fund industry include:
- Social Security Trust Funds: Manages the United States’ social security program, serving as a cornerstone of retirement income for millions.
- AT&T Corporate Pension Fund: One of the largest corporate pension funds, providing retirement benefits to AT&T employees.
- California Public Employees’ Retirement System (CalPERS): The largest public pension fund in the U.S., offering retirement and health benefits to public employees, retirees, and their families.
- 1199SEIU Pension and Retirement Funds: Provides pension and retirement benefits to healthcare workers in the United States.
- National Railroad Retirement Investment Trust: Manages assets to provide retirement benefits to railroad workers across the U.S.
Conclusion
The global pension fund industry is on a robust growth trajectory, driven by strategic diversification into alternative investments and the integration of advanced technologies to enhance member engagement. As defined contribution plans gain prominence, there is an increased emphasis on personalized strategies to meet individual member needs. Key players continue to influence the market through substantial assets under management and innovative approaches to fund management. With assets projected to reach USD 104.61 trillion by 2030, the industry is poised to play a pivotal role in securing financial stability for retirees worldwide.
Industry Related Reports
US Pension Funds Market: The United States pension fund industry is categorized by the type of pension plan, including Defined Contribution, Defined Benefit, Reserved Fund, and Hybrid plans.
United Kingdom Pension Fund Market: The United Kingdom’s pension fund market is classified based on the types of pension plans, including Defined Contribution (DC), Defined Benefit (DB), Hybrid, and Others.
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