DC Plan Growth Keeps US Retirement Market as World’s Largest

Global retirement assets rose by 4.9% in 2024, reaching $58.5 trillion, 65% of which were in the U.S., according to new research from WTW’s Thinking Ahead Institute. At the end of 2023, pension assets were valued at $55.7 trillion.

WTW attributed the growth in defined contribution assets in 2024 to DC plans’ higher exposure to growth assets. DC assets have grown by an average of 6.7% per year since 2014, while defined benefit assets have grown at 2.1% per year, according to WTW.

“The rise of DC becomes more pronounced every year that we conduct this study,” said Jessica Gao, director at the Thinking Ahead Institute, in a statement. “While global pension assets continue to reach new record levels, it is those markets with larger pools of DC assets that are the main engine behind this continued growth.”

The four countries with the most assets – including the U.S, Japan, Canada and the U.K. – accounted for 82% of all global retirement assets globally.

Growth in the U.S. and across most of the large markets was driven by defined contribution plans, which in many countries made up a majority of retirement assets. When adding Australia, the Netherlands and Switzerland to the four largest retirement asset markets, defined contribution accounts made up 59% of total assets in those seven countries.

Traditional pension funds are usually defined benefit plans, in which the retiree receives an income for life based on their tenure with an employer and their salary level. Defined contribution plans provide a retiree the assets accumulated from their own and their employer’s contributions, plus investment earnings.

Growth does vary by country. In Australia, with its mandatory superannuation system, pension assets have grown 110% since 2014 and 500% over the past 20 years. WTW expects Australia to have the world’s second-largest pension market by 2030 if this growth trajectory continues.

U.S. pension assets have grown by 75% since 2014. Like Australia, a majority of U.S. pension assets are in DC plans. In Australia, this figure is 89%, while in the U.S., 69% of assets are in DC plans. 

The U.K., with only 27% of assets held in defined contribution plans, was the only one of the seven countries with the most retirement assets in which those assets declined over the past year, shrinking 0.7%.