According to the draft document, the value of pension assets decreased in most countries of the Organization for Economic Cooperation and Development (OECD) in 2022, dropping by 15.6% on average.

The document points out that the above is caused by a negative return on the funds’ nominal investment rates. In fact, it explains that in the case of fixed income instruments – which are the main assets comprising the portfolios of pension funds – “they have experienced significant drops in valuation worldwide due to high inflation and interest rates.”

Equity performance also played a role. “Widespread declines in stock valuations have exacerbated negative returns in several markets,” the report said.

While the 38 OECD countries mentioned in the report recorded negative real rates of return during 2022, there were six countries that managed to contain that situation, and the red fund performance figures did not translate into a drop in the value of pension assets. In fact, that was the case in Chile, since the total value of pension assets rose by 4.4% to US$174,792 last year, according to the OECD. This means that the total value of pension funds in the country is now 57.7% of GDP, according to this study. In addition to Chile, the other 5 countries of the 38 OECD countries that also gained ground were Korea, New Zealand, the Czech Republic, France and Türkiye, although the latter showed extraordinary increases of 197.2% and 79.1%, respectively.

In the case of France it was probably due to a restructuring of the sector with the transfer of assets from the pension contracts of insurance companies to a new pension fund vehicle subject to a different regulatory regime. Meanwhile, in the case of Türkiye, it was partly due to an increase in pension contributions.

The report also said that assets increased in 24 of the 32 reporting jurisdictions outside the OECD.