,Global Pension Assets Study 2017, 2017 Willis Towers Watson. All rights reserved., 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For WillisTowers Watson and Willis Towers Watson client use only.,2,Global Pension Assets Study 2017 Executive Summary,3,Global Pension Assets Study 2017 Survey Coverage,The study covers 22 major pension markets, which total USD 36,435 billion in pension assets and account for 62.0%1 of the GDP of these economies. China, Finland and Italy were added to this years study. We use the shorthand P22 to denote them. We perform a deeper analysis for seven of these markets (Australia, Canada, Japan, Netherlands, Switzerland, UK and US) and use the shorthand P7 to denote them. The P7 countries comprise 91.7% of total assets. The analysis is organised in three sections: Asset size, including growth statistics and comparison of asset size with GDP (P22) Asset allocation (P7) DB and DC share of pension assets (P7), 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For WillisTowers Watson and Willis Towers Watson client use only.,UK,Ireland,Switzerland,US,India,Australia Canada Japan Netherlands Switzerland UK US,P22,P7,Italy Japan Malaysia Mexico Netherlands South Africa South Korea Spain,Australia Brazil Canada Chile China Finland France Germany HK,1The,ratio of Total Pension Assets to GDP declined from 2016 with the addition of China. Chinas pension assets represent 1.2% of total GDP.,4,Global Pension Assets Study 2017 Key Findings P22 pension assets at the end of 2016 At the end of 2016, total pension assets were estimated at USD 36,435 billion, which represents an increase of 4.3% compared to USD 34,931 billion at the end of 2015 Pension assets relative to GDP reached 62.0%1 in 2016, which represents a decrease of 18.0% from the 2015 ratio of 80.0% The largest pension markets are the US, UK and Japan with 61.7%, 7.9% and 7.7% of total pension assets in the study, respectively In USD terms, the pension assets growth rate of these three largest markets in 2016 were 5.1%, 1.3% and 5.1% respectively It is important to caveat the impact of the currency exchange rates when measuring the growth of pension assets in USD, as in many cases, the results vary significantly with those in local currency terms, 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For WillisTowers Watson and Willis Towers Watson client use only.,1The,ratio of Total Pension Assets to GDP declined from 2016 with the addition of China. Chinas pension assets represent 1.2% of total GDP.,5,Global Pension Assets Study 2017 Key Findings P7 asset allocation at the end of 2016 At the end of 2016, the average global asset allocation of the seven largest markets was 46% equities, 28% bonds, 24% other assets (including real estate and other alternatives) and 3% cash The asset allocation pattern has changed since 1996. Allocation to other assets have increased while allocation to equities and bonds have decreased. US, Australia and the UK have higher allocations to equities than the rest of the P7 markets. Switzerland, Japan and the Netherlands have more conservative investment strategies higher allocation to bonds., 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For WillisTowers Watson and Willis Towers Watson client use only.,P7 DB/DC allocation at the end of 20161 During the last 10 years, DC assets have grown at a rate of 5.6% pa while DB assets have grown at a slower pace of 2.6% pa DC assets represent 48.4% of total P7 pension assets, in line with the established trend towards the growing dominance of DC plans DC is dominant in Australia and the US. Japan and Canada, both predominantly only DB, are now showing signs of a shift to DC,1The majority of pension fund assets in Switzerland are DC and take the form of cash balance plans, whereby the plan sponsor shares the investment risk and the assets are pooled. Pure DC assets have only recently been introduced in Switzerland and, although they have seen strong growth, they are not yet large enough to justify inclusion in this analysis.,Includes IRAs.,The Assets/GDP ratio for individual markets are calculated in local currency terms, and the total,6,Global Pension Assets Study 2017 Key findings Figures, 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For WillisTowers Watson and Willis Towers Watson client use only.,Source: Willis Towers Watson and secondary sources 1Only includes pension assets from closed entities. 2Only includes Enterprise Annuity assets. 3Only includes pension assets for company pension schemes. 4Does not include the unfunded benefit obligation of corporate pension plans (account receivables). 5Only includes autonomous pension funds. Does not consider insurance companies assets.,6 7 Assets/GDP ratio is calculated in USD. 8 The ratio of Total Pension Assets to GDP declined from