Pension funds urged to measure and communicate broader social value

Pension funds can play a greater role in addressing societal challenges without compromising investment returns or fiduciary obligations, according to a new report released by the International Centre for Pension Management.

The report, Societal Infrastructure Blueprint: A Roadmap for Pension Funds, argues retirement funds already generate significant social benefits beyond providing retirement incomes, but often fail to recognise, measure or communicate that value.

Developed by a working group comprising almost 20 pension fund leaders globally, the framework outlines how funds can strengthen their contribution to member wellbeing and broader economic resilience while remaining firmly anchored to their fiduciary duties.

The report arrives as pension systems face mounting pressure from aging populations, growing inequality and changing member expectations. According to the blueprint, the global population aged over 65 is expected to exceed 1.6 billion by 2050, while infrastructure investment gaps in areas such as housing, healthcare and education are forecast to reach US$15 trillion by 2040.

With pension funds collectively managing more than US$56 trillion in assets worldwide, the report positions the sector as uniquely placed to help address these challenged through its long-term investment horizon scale.

"Understanding how pension funds build social infrastructure is especially important now, as aging populations and rising inequality are starting to strain public systems, and evolving member expectations challenge existing pension models," Working Group co-plead Gareth Gibbins said.

"This Blueprint gives pension funds a practical, structured path to recognize that role, act on it, and measure it, without stepping outside their fiduciary mandate."

The framework is built around three stages. The first encourages funds to identify and communicate the broader benefits they already deliver, including reducing elder poverty, improving health outcomes and supporting social cohesion.

The second stage focuses on optimal initiatives that can deepen social impact, including investments in affordable housing, healthcare infrastructure and education alongside expanded member services such as financial literacy programs and wellness support.

The final stage centres on measuring outcomes through tools such as social return on investment and wellbeing valuation frameworks, enabling funds to quantify and report their broader social contribution.

The report argues stronger measurement and disclosure will improve transparency, strengthen member trust and help funds demonstrate their value to policymakers and stakeholders.

Drawing on case studies from Denmark, Singapore, Canada and Australia, the blueprint concludes social impact should not be viewed as an adjunct to pension fund activity, but as a natural extension of the sector's core purpose of delivering long term financial security and societal stability.