Assets earmarked for retirement

Assets in pension plans amounted to USD 51.5 trillion at end-2022 in the OECD area (Table 9.2). The United States had the largest pension market within the OECD area with assets worth USD 35 trillion, representing 67.9% of the OECD total. Other OECD countries with large pension systems include Canada, with assets worth USD 3.1 trillion and a 6.1% share of the OECD pension market in 2022; the United Kingdom, USD 2.6 trillion and 5.0%; Australia, USD 2.1 trillion and 4.1%; the Netherlands, USD 1.5 trillion and 3.0%; Switzerland, USD 1.3 trillion and 2.5%; and Japan, USD 1.3 trillion and 2.5%.

Pension assets in the OECD amount to 87% of the sum of the GDPs of all OECD countries at end-2022, but their prominence domestically varies across countries. In seven OECD countries, assets exceeded the size of the GDP: Denmark (192.3%), Iceland (186.1%), Canada (152.8%), Switzerland (152.4%), the Netherlands (150.7%), the United States (137.5%) and Australia (131.4%). These countries have pension plans from long ago, and with the exception of Canada and the United States, have mandatory or quasi-mandatory private pension systems. By contrast, the asset-to-GDP ratios were below 20% in 18 OECD countries, including some with relatively recent mandatory or auto-enrolment programmes (such as Latvia, Lithuania and Poland) or with relatively low participation of the working-age population (such as France, Greece, Italy). Greece recorded the lowest amount of assets relative to its GDP among OECD countries (below 1%).

In non-OECD G20 economies, the size of pension plan assets also varied widely, from 78.2% in South Africa to 1.7% of GDP in Indonesia (for employer pension funds and financial institution pension funds).

Many countries also decided to accumulate assets in order to support the operation of public pension arrangements, usually financed on a pay-as-you-go basis. Nearly two-thirds of OECD countries hold reserves that are separated and ring-fenced in public pension reserve funds (PPRFs). By the end of 2022, the total amounts of assets in PPRFs were equivalent to USD 6.4 trillion in the OECD area (Table 9.2). The largest reserve was held by the US social security trust fund at USD 2.7 trillion, accounting for 42.6% of total OECD assets in PPRFs, although the assets consist of non-tradable debt instruments issued by the US Treasury to the social security trust. Japan’s Government Pension Investment Fund was second at USD 1.4 trillion – 22.7% of the OECD total. Of the remaining countries, Korea, Canada, Sweden and Australia had also accumulated large reserves, respectively accounting for 11.2%, 7.4%, 2.7% and 2.1% of the total.

In terms of total assets relative to the national economy, PPRF assets accounted for 11.7% of the sum of the GDPs of all OECD countries with reserves at end-2022. The highest ratio was observed for Korea’s reserves in its National Pension Fund and Government Employees Pension Fund, at 41.9% of GDP. Other countries where the ratio was of a significant size include Japan with 34.4%, Finland with 31.2%, Sweden with 30.5% and Luxembourg with 30.1%. The expansion of these pools of assets is expected to continue over the coming years in some countries (such as Canada, New Zealand) but assets in some other PPRFs have already started to fall or will fall in the near future (such as in France (FRR)). Several countries (e.g. Germany and Spain) are considering setting up a reserve fund or boosting theirs. Germany is building a generational capital fund. Spain made new contributions to the existing reserve fund in 2022 and established a new reserve fund in 2023, the Intergenerational Equity Mechanism, financed by special contributions from employees and employers from 2023 to 2050, to ensure public pensions could continue to be indexed on price increases.

The term “pension plans” refers to plans that individuals access via their employer or a financial institution, and in which they accumulate rights or assets. Assets belong to plan members and finance their own future retirement. These assets may accumulate in pension funds, through pension insurance contracts or in other savings vehicles offered and managed by banks or investment funds. Employers may set up provisions or reserves in their books to finance the retirement benefits of occupational pension plans.

PPRFs are reserves established with the primary goal to support unfunded / pay-as-you-go public pension arrangements. These public reserves do not belong to any specific group of individuals. They could act as a short-term liquidity buffer, a temporary buffer against shocks (such as a demographic change) or as a permanent smoothing vehicle between the inflows and outflows of public pension arrangements.

Further reading

OECD (2021), Pension Markets in Focus 2021, OECD, Paris,

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