PFAs grow attributes to capital gains in financial markets and government measures

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National Pension Commission (PenCom)

From the preliminary data of 2020 reviewed so far has revealed that pension funds held over $35 trillion of assets worldwide at end-2020, exceeding 2019 levels despite the headwinds due to COVID-19

According to Pension Funds in Figures disclosed that Pension fund assets continued to rise in 2020 in almost all countries. This increase was supported by capital gains in financial markets and government measures that helped members to continue participating in their pension plans.

“Pension fund assets (PFAs) grew by nearly nine percent in the OECD area to reach $34.2 trillion at end-2020. Outside the OECD area, pension fund assets amounted to $0.8 trillion at end-2020 in a group of 31 jurisdictions, just over one percent more than at end-2019.

The report stated that some of the strongest asset rises in nominal terms occurred in Georgia (over 100%) where participation in a 2 nd pillar pension scheme has become mandatory since 1 January 2019, and France (84%) where insurance companies have started creating and transferring pension business to FRPS (i.e. a newly authorised vehicle that is a pension fund).

Only 5 out of 68 jurisdictions reported a decrease in pension fund assets: Australia (-1.2% between end-June 2019 and end-June 2020), Poland (-3.7%), Chile (-5.2%), Jamaica (-5.7%) and Peru (-5.7%).

The reports across the globe further disclosed that investment losses in financial markets contributed to this decline in Australia (at end-June 2020), Jamaica and Poland, pension funds in Chile and Peru experienced significant outflows as members took advantage of the repeated opportunities granted during the COVID-19 outbreak to withdraw part of their savings from their individual accounts.

The figures shown details of the amount of assets in pension funds varies greatly by country, with seven countries in the OECD area responsible for more than 90% of pension fund assets: Australia (USD 1.8 trillion), Canada (USD 1.6 trillion), Japan (USD 1.5 trillion), Switzerland (USD 1.2 trillion), the Netherlands (USD 2.1 trillion), the United States (USD 20.1 trillion) and the United Kingdom (USD 3.2 trillion)


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