The Thinking Ahead Institute Pensions & Investments 300 is a joint annual research study of the world’s 300 largest pension funds over 2019.
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- The world’s leading pension funds covered in this survey have sustained respectable growth in recent years, amounting to 4.9% per annum in the past five years
- However, this has not made them resilient to pressures from multiple sources. Solvency concerns, stakeholder expectations, the COVID-19 ramifications, sustainability pressures and other challenges have compounded to make pension fund boards’ agendas more complex and stressed than at any previous times
- Defined benefit (DB) fund boards’ solvency concerns sit alongside the management of defined contribution (DC) participant expectations. Both fund types have faced up to the gathering headwinds by increasingly stretching their risk budgets to meet return targets and future goals. This has resulted in increased allocations to private assets in recent years
While pension funds have become increasingly aware of the financial dimensions of ESG and have been developing their sustainability policies and practices accordingly, expectations on them continue to
grow. Within ESG, their focus is being directed towards climate and social considerations
- US$140 billion (AuM) is the entry level for the top 20 grouping. These larger funds continue to develop stronger governance capabilities supported by larger spends on people and technology. They have significantly increased their internal resources in recent years
- Pension funds generally have lagged other industries in the digital revolution. Technology offers a coordinating mechanism to improve the people, process, and information factors that are central to successful pension fund outcomes and will increasingly determine which funds prosper in the years ahead.