While the names in the ranking of the 20 largest pension funds in the world were unchanged in 2015 vs. 2014, there was plenty of movement.
And foreign-exchange effects — because the survey is produced in U.S. dollars — had a big influence over the past five years.
Japan's Government Pension Investment Fund, Tokyo, retained the crown as the largest fund in the world, with $1.16 trillion of assets. Compared with 2014's survey, GPIF's assets increased 1.7% over the year in dollar terms. In local currency, the fund finished 2015 with ¥139.8 trillion — up 2%. The yen depreciated 0.37% vs. the dollar over the year 2015.
However, the effects of currency were more acute for Norway's Government Pension Fund Global, Oslo. Although it remained in second place, with $866 billion of assets — down 2% in U.S. dollar terms — it actually gained 16.2% over the year in Norwegian kronor terms. The dollar gained 18.67% vs. the Norwegian kroner over the year.
The Federal Retirement Thrift Investment Board, Washington, took third place in 2015, with assets growing 5% to $443.3 billion. It supplanted Korea National Pension Service, Seoul, with assets increasing 1.3% in dollar terms to $435.4 billion. But in local currency, assets grew 9% to 512.3 trillion Korean won. The Korean won lost 5.92% vs. the dollar over 2015.
Remaining in fifth place was Stichting Pensioenfonds ABP, Heerlen, Netherlands, with assets dropping 8.2% to $384.3 billion. The impact of the euro's 11.42% fall vs. the dollar was clear, since assets actually increased 2% in euro terms.
Elsewhere in the top 20, China's National Social Security Fund, Beijing, took sixth place, up from seventh last year, growing 19.2% to $295 billion. The RMB depreciated 5.66% over the year. It pushed California Public Employees' Retirement System, Sacramento, down one place into seventh, with assets falling 3.4% to total $285.8 billion at Dec. 31, said the survey.
Singapore's Central Provident Fund jumped two places to eighth, with assets totaling $211.4 billion, and pushing the Canada Pension Plan, Ottawa, into ninth place with $201.9 billion of assets at March 31, 2016 - the Canadian dollar fell 19.09% vs. the U.S. dollar over 2015. Dutch pension fund Pensioenfonds Zorg en Welzijn, Zeist, rounded out the top 10 — falling one place. Assets fell 13.3% in dollar terms to $186.5 billion at March 31, 2016, but grew 1.2% in euro terms.
Willis Towers Watson analyzed average annualized growth by markets over the five years ended Dec. 31, both in dollar terms and local currency. Most pension funds experienced higher growth rates in local currency terms over that period, largely due to the dollar's appreciation.
Split by the domicile of the top 20 funds, the highest growth was found in China, at 17.8% in dollar terms. In local currency terms, however, Chinese funds experienced 17.4% annualized growth over five years.
Norway-based funds in the top 20 grew 9.5% in dollar terms vs. 19% in Norwegian kronor terms, and South Korea funds grew 8.5% in dollar terms but 9.5% in local currency. n