Pension Markets in Focus 2025

Executive summary

This edition of Pension Markets in Focus examines developments in asset-backed pensions in 2024 and discusses the factors behind the record level in pension assets achieved that year.

Assets earmarked for retirement reached a new record level in 2024

After a drop in 2022, pension assets grew in 2023 and continued growing in 2024, with a 7.1% average growth in OECD Member countries. Assets reached a record level of USD 69.8 trillion at end-2024 in OECD Member countries, and USD 2.9 trillion in non-OECD jurisdictions. This record level reflects a widespread increase in assets under management of pension providers in all OECD and most non-OECD jurisdictions, and in most public pension reserve funds. Assets grew in all types of plans. However, the importance of occupational defined benefit (DB) plans diminished as they only grew by 4% compared with 11.4% in occupational defined contribution plans and 9.3% in personal plans. Assets in occupational DB plans accounted for 31.9% of pension plan assets at end-2024, compared to 33.2% at end-2023 and 39.7% at end-2014. Consolidation in some countries has led to an increase in the average size of the assets that pension providers manage.

Positive investment gains in 2024 explain the growth in pension assets

Asset growth in 2024 primarily reflects positive nominal investment rates of return. The average nominal investment rate of return was 9.1% for pension providers in OECD Member countries, 11.7% for those in non-OECD jurisdictions, and 8.5% for public pension reserve funds. Returns were generally above their longer-term average. Asset-backed pension plans with the highest equity exposure generally witnessed some of the strongest investment gains in 2024, driven by positive developments in global equity markets. Pension providers and public pension reserve funds had larger equity holdings at end-2024 than a year before, resulting from the increasing value of equities in their portfolios or an active reallocation of assets towards equities.

Positive cash flows from contributions over benefit payments also contributed to the growth in assets

Pension providers generally benefitted from a positive cash flow of contributions over benefit payments in 2024, which further supported the growth in assets in 2024. Contributions to asset-backed pension plans continued to grow in 2024, and so did benefit payments, as asset-backed pension systems matured and more people were entitled to pension benefits.