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Australian Super ranks among world's largest pension funds

3 minute read

Australian Super now ranks among the top 20 pension funds in the world.

The local superannuation giant has entered the top 20 pension funds in the world, ranking last on the ladder with total assets of US$169.06 billion, according to annual research conducted by WTW’s Thinking Ahead Institute.

Australian Super gained two spots over the past 12 months, having experienced a US$12.8 billion boost in assets.

Commenting on the fund's inclusion in the top 10, Rose Kerlin, Australia Super group executive, membership and brand, said: "As Australia’s largest super fund, we believe size and scale are critical to helping us to deliver on our purpose of enabling members to achieve their best financial position in retirement."

"Nearly 2.9 million Australians now trust us to manage their retirement savings. As a large investor, we leverage our size and scale to invest globally and deliver the benefits to members through strong long-term performance," Ms Kerlin said in a written statement to InvestorDaily. 

A total of 15 Australian super funds were included in WTW's research, with Future Fund in 26th position with assets of US$147.9 billion.

Globally, assets under management (AUM) at the world’s top 300 pension funds increased by 8.9 per cent to reach a new record, totalling $23.6 trillion in 2021.

Commenting on the findings, Marisa Hall, co-head of the Thinking Ahead Institute, said the research paints a picture of two halves.

“On the one hand, a new record for the world’s major pension funds illustrates the optimism that defied a global pandemic. Yet on the other, growth is slowing and the long-term dashboard is flashing amber,” Ms Hall said.

“Looking ahead, rising inflation and subsequent central bank action are likely to cause global growth to falter, which may in turn endanger longer term the funding status of pension funds,” she explained.

According to the research, the top 20 pension funds constituted 41 per cent of the total assets. Moreover, on average, they invested approximately 53.5 per cent of their assets in equities, 27.9 per cent in fixed-income securities, and 18.6 per cent in alternatives and cash.

“We’re seeing asset allocation continue to respond to long-term structural shifts. While allocations to private markets declined compared with the previous year, we believe this was mostly caused by shorter-term inflationary and rate-hike fears,” Ms Hall said.  

Looking forward, WTW expects private markets to continue to expand considerably in the investment space over the long term, reflecting a need for new primary investment to support new models of sustainable economic growth.

“It’s clear that pensions can be a force for good to contribute to overcoming the substantial challenges in the world, but also a barometer of major questions we all face over the coming decades,” concluded Ms Hall.

The Government Pension Investment Fund of Japan (GPIF) remained the largest pension fund in the world in 2021, leading the table with AUM of over US$1.7 trillion. It has ranked top since 2002.

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.