Australian superannuation funds achieved the fourth highest growth rate of funds under management worldwide between 2009-2014, according to Towers Watson.

Only Chinese, South Korea and Norwegian pension funds achieved higher growth rates when measured in US dollars, while Australia overtakes Norway to move third when assets are measured in local currency.

Chinese funds grew an average 17 per cent return in local currency and 15 per cent in US dollar terms, compared to 14 per cent for Australian funds in local currency and 11 per cent in US dollars.

Paul Newfield, senior investment consultant for Towers Watson in Australia, attributed the relatively high growth of domestic pension funds to Australia’s high preponderance of defined contribution schemes with higher allocations to equities and the relative success of such growth assets over the past five years.

He warned this asset allocation could work against domestic funds in the future. “With the context of more volatility finding its way into equity markets and with lower year-to-date returns in 2015 so far and more modest returns expected in the year to come, the real challenge for Australia’s retirement savings is how to continue to better diversify the drivers of superannuation fund returns,” he said.

In a report awash with statistics, Towers Watson’s P&I / TW 300 analysis, also noted that by fund type, defined benefit assets represent 66.8 per cent of assets (down from 75 per cent five years ago), defined contribution represent 21.2 per cent of assets, hybrid funds 0.7 per cent and reserve funds 11.3 per cent of assets.

By country the USA funds represent 128 of the top 300 largest pension funds in the world, followed by the UK with 27, Canada with 19 and Australia with 18.

The five largest funds in the world are the Government Pension Investment plan (Japan) with $1.14 trillion in assets, the Government Pension Fund (Norway) with $884 billion, the National Pension (South Korea) with $429 billion, the Federal Retirement Thrift (U.S) $422 billion and the ABP (Netherlands) with $418 billion.