Private retirement assets reached a peak of $38.1 trillion across OECD countries in 2016, but continued pressure on plans could see increased exposure to riskier assets, research shows.
Total assets grew 3.5% in 2016. In 2015, assets decreased 2.4%.
The Organization for Economic Cooperation and Development's latest "Pensions Markets in Focus" report said investment losses due to the 2008 global financial crisis have been recouped across almost all OECD countries, although lower yields on bond allocations and low interest rates continue to pile pressure on plan sponsors and other pension providers.
"This has given rise to concerns that pension providers could increase their exposure to riskier investments in a search for potential higher yield," the report said.
The annual report covers 85 countries and gives an overview of private retirement systems across the world.
In 2016, 28 of the 31 reporting OECD countries, and 25 of the 32 reporting non-OECD countries, reported positive real investment rates of return across their retirement assets. Average investment returns were above 2% for both OECD and non-OECD countries.
Around 66% of private retirement assets are held in U.S. plans. Significant retirement assets were also found in Australia, Canada, Denmark and the Netherlands, where they exceed the size of the gross domestic product of those countries, the report said. "This reflects a trend which has seen pension assets grow faster than GDP in most countries over the last decade."
Six OECD countries have more than $1 trillion in retirement assets: Australia, Canada, Japan, the Netherlands, the U.K. and the U.S.
The report also found overseas exposure is concentrated in eurozone countries with small domestic capital markets. The report said 92% of Kosovo-based retirement assets are invested overseas, followed by the Netherlands at 81% and Estonia at 76%.
The report is available on the OECD's website.
