Studies showed that the pension fund assets in the world's largest markets increased by 8.9% in 2012, as retirement systems diverted their interest to other investments to survive the current economic unpredictability. The institutional pension fund assets from 13 key markets had increased by 9% attaining a new level of US$30 trillion. Whereas, the pension fund assets of United Kingdom showed a 5% increase compared to 2012, hitting an all-time high of GBP1.7 trillion. Data are based on a report from Towers Watson. The growth in pension plans from 13 countries which includes the United States, Australia, Germany, Britain, Japan and Netherlands was a result of employing more qualified employees to oversee pensions, much improved investment options and outsourcing portfolios.
According to Towers Watson, a consultancy firm that provides advises to institutional investors which include risk management and pension funds on business ventures, the pension assets of the countries mentioned accounted for 78.3% of the gross domestic product of their respective economies. Comparing the results from 2007 that attained a level of 78.8%, this though is a lot lower but accounted higher than the level for 2011 which was at 72.2%. Since 2002, the global pension fund assets have increased by approximately 7% annually.
The levels of funding of pension plans are based on factors such as returns of the equity market, earnings on currency and its present economic growth. From the 13 countries, 7 of them have shown that pension funds have diverted from bond and cash allocation investments in the last 18 years. The United States, Australia, Germany, Britain, Japan and Netherlands have broadened their alternative investment options to commodities, property, private equity and hedge funds. Study showed that there was an average increase of 5% to 19% since 1995.
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