Global institutional pension assets grew to $36.43trn at the end of 2016, a 4.3% increase from $34.9trn at the end of 2015, according the Willis Towers Watson’s Global Pension Assets study.

Total pension assets relative to GDP however decreased by 18% from the 80% ratio in 2015 to 62% in 2016. The Netherlands has the highest ratio (168%), followed by Australia (126%), Switzerland (123%), the US (121%) and UK (108%).

The US continues to be the largest market in terms of pension assets (61.7%), UK (7.9%) and Japan (7.7%) of total pension assets in the study. In the US dollar terms, the pension assets growth rate of these three largest markets in 2016 were 5.1%, 1.3% and 5.1% respectively.

The smallest markets in descending order were: Ireland, India and Spain.

The report also shows that pension fund assets have grown at 3.8% on average per year (in USD) over the past five years, with the growth rate highest in China (20.3%), where the study covers the Enterprise Annuities market, and lowest in Japan (-5.4%).

During the past 10 years, Mexico has seen the fastest compound annual growth rate (11.8%), followed by South Africa (9.7%), Chile (9.2%), Brazil (8.0%), Australia (7.9%) and Hong Kong (7.8%).

Growth in defined contribution (DC) assets continued to outstrip that of defined benefit (DB) assets, with DC assets now accounting for over 48% of global pensions assets, compared with 41% in 2006.

During the last 10 years, DC assets have grown at a rate of 5.6% per annum, compared with DB assets that have grown at a slower pace at 2.6% per annum.

Countries with a higher allocation to DC assets in 2016 were Australia with 87% and the US with 60.1%.

During the past 20 years, the study also identified a decline in allocations to equities and bonds, offset by an increase in allocations to alternative assets, with the latter sharply increasing from 4% to 24%.

The Willis Towers Watsons study covers 22 major pension markets. China, Finland and Italy were added to this year’s study.