Unprecedented Pensions Collapse in 2022 Surpasses Financial Crash, Reports The Irish Times

Pensions Assets Suffer Worst Collapse Since Financial Crash

A new report confirms that pensions assets last year suffered their worst collapse since the financial crash 15 years ago.

Key Findings

• Assets under management for the 300 largest pension funds in the world tumbled by 12.9%.
• This is the first loss by the sector in five years and the worst in the 20 years of data studied.
• The collapse in assets was even worse in the 22 countries with the largest pensions assets, including Ireland, where it hit 16.7%.
• This follows more than a decade of uninterrupted growth.

Global Polycrisis

“Last year we experienced, to an extent, a global polycrisis where various risks combined, were amplified as a result, and manifested in significant asset falls,” said Thinking Ahead Institute head Marisa Hall.

Ireland’s Performance

Ireland fared well compared to other countries in the report.

• Irish pension funds have delivered compound annual growth rates of 4.6% over the past 10 years.
• Assets have jumped from $106 billion (€99 billion) in 2012 to an estimated $166 billion.
• Ireland is the seventh most successful in terms of average growth among the 22 large pension markets over the decade.

Comparison with Other Countries

China had the highest growth rate at 17.5% per annum, followed by South Korea (9%) and India (8.2%). The US also fared well with a growth rate of 6.1%.

The UK saw pension assets contracting by an average of 1.1% every year of the decade.

Germany, France, and Spain reported negative annual growth rates, while Italy and the Netherlands grew.

Ireland’s Performance Over a Shorter Period

Ireland is one of nine countries to report negative compound annual growth rates over a shorter five-year period (-1.2% per year) in dollar terms.

However, in local currency terms, Ireland fared better with a loss of 10.8% in 2022 and a positive growth rate of 1.1% per annum for the 2017-22 period.