Key Takeaways
- • Global pension assets reached USD 68.3 trillion in 2025, expanding 9.6% year-on-year and creating USD 6.0 trillion in new asset value driven by strong equity and bond market performance.
- • Defined contribution (DC) assets now represent 63% of the top seven global pension markets, with Australia (90%) and the US (72%) leading DC adoption; DC assets have grown at 9.4% annually over the past decade.
- • Canada surpassed Japan to become the second largest pension market globally with 12% year-on-year growth, while the US dominates as the largest market at 66% of the Top 22 markets.
- • US pension funded ratios improved to 82.5% in 2025 from 78.0% the prior year, with total unfunded liabilities declining from USD 1.54 trillion to USD 1.27 trillion, signaling strengthened pension health.
- • Market performance in 2025 was characterized by sustained recovery, strong investor sentiment, and contained volatility across equities and bonds, benefiting pension fund valuations globally.
Summary
Global pension assets expanded substantially in 2025, reaching a record USD 68.3 trillion—a 9.6% year-on-year increase that outpaced 2024 performance. According to the Thinking Ahead Institute's Global Pension Assets Study, the growth was underpinned by USD 6.0 trillion in newly created asset value, driven by favorable conditions across both equity and fixed-income markets. The year demonstrated sustained recovery across global markets with strong investor sentiment and relatively contained volatility, conditions that proved beneficial for pension fund allocations.
Defined contribution (DC) plans emerged as a critical growth engine, now representing 63% of assets across the top seven global pension markets. Australia and the US lead DC adoption at 90% and 72% respectively, followed by Canada at 44%. Over the past decade, DC-dominant markets have delivered above-average growth rates: Australia at 6.6% annually, the US at 7.7% annually, and Canada at 5.3% annually. This structural shift reflects the ongoing global transition from defined benefit (DB) to DC pension structures across developed markets.
Geographic rankings shifted significantly in 2025. Canada achieved 12% year-on-year growth and overtook Japan for the first time to claim second place in global pension markets. The US remains the dominant market, comprising 66% of the Top 22 pension markets by assets. In contrast, the UK experienced weak growth of only 1.4% annually over the past decade and has fallen to fourth place from second in 2015. Other strong performers included South Korea, Switzerland, and Hong Kong, each exceeding 8% annualized growth over the past decade.
In the US market specifically, pension health metrics improved measurably. The national average funded ratio rose from 78.0% to 82.5% in 2025, while total unfunded liabilities decreased from USD 1.54 trillion to USD 1.27 trillion—a USD 270 billion improvement in unfunded obligations. These metrics underscore the positive impact of market performance on pension solvency and contribution requirements for plan sponsors.
Defined contribution (DC) plans emerged as a critical growth engine, now representing 63% of assets across the top seven global pension markets. Australia and the US lead DC adoption at 90% and 72% respectively, followed by Canada at 44%. Over the past decade, DC-dominant markets have delivered above-average growth rates: Australia at 6.6% annually, the US at 7.7% annually, and Canada at 5.3% annually. This structural shift reflects the ongoing global transition from defined benefit (DB) to DC pension structures across developed markets.
Geographic rankings shifted significantly in 2025. Canada achieved 12% year-on-year growth and overtook Japan for the first time to claim second place in global pension markets. The US remains the dominant market, comprising 66% of the Top 22 pension markets by assets. In contrast, the UK experienced weak growth of only 1.4% annually over the past decade and has fallen to fourth place from second in 2015. Other strong performers included South Korea, Switzerland, and Hong Kong, each exceeding 8% annualized growth over the past decade.
In the US market specifically, pension health metrics improved measurably. The national average funded ratio rose from 78.0% to 82.5% in 2025, while total unfunded liabilities decreased from USD 1.54 trillion to USD 1.27 trillion—a USD 270 billion improvement in unfunded obligations. These metrics underscore the positive impact of market performance on pension solvency and contribution requirements for plan sponsors.
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