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This risk dashboard, based on individual occupational pensions regulatory reporting, summarises the main risks and vulnerabilities in the European Economic Area (EEA) Institutions for Occupational Retirement Provision (IORPs) sector for the different schemes, i.e. defined contributions (DC) and defined benefits (DB), through a set of risk indicators. It should be noted that depending on the characteristics of the pension scheme, risks might not ultimately be borne by the IORPs themselves but by their members and beneficiaries or their sponsors.

The risk dashboard shows for each risk indicator the distribution of the individual reported data over time together with the weighted average, capturing the relative importance of the different entities for the sector. For specific indicators, this information is complemented by relevant data from external sources.


July 2025 IORP Risk Dashboard

The reference date for IORP data is Q1-2025 for quarterly indicators and 2024-YE for annual indicators. The cut-off date for indicators based on data from external sources is end-June 2025. The Level (colour) corresponds to the level of risk as of the reference date, the Trend is displayed for the 3 months preceding the reference date and the Outlook is displayed for the 12 months after the reference date. The latter is based on the responses received from 16 national competent authorities (NCAs) and ranked according to the expected change in the materiality of each risk (substantial decrease, decrease, unchanged, increase and substantial increase). More details can be found in the appendix.




Key Observations





Macro risks

Macro-related risks are at a medium level surrounded by uncertainty. GDP growth projections (across major geographical regions) for the next four quarters decreased to 1.0% in the second quarter of 2025 (1.4% in the previous quarter). Forecasted inflation slightly shifted downwards to 2.3% in the same quarter (2.4% in the previous quarter). The weighted average of the 10-year swap rates for major currencies remained stable at 2.9% in the second quarter of 2025. Unemployment rates (weighted average across major geographical areas) slightly increased to 5.1% in the first quarter of 2025 (5.0% in the previous quarter), while euro area wage growth continued to decline to 3.4% (3.7% in the previous quarter).



Note: Average of forecasts four quarters ahead, weighted average for Euro area, United Kingdom, Switzerland, United States and BRICS based on EEA IORPs’ investment exposures.
Source: Bloomberg Finance L.P.

Source: Eurostat, Euro Area Labour Cost Index (LCI)

Note: Weighted average for EU, Switzerland, United Kingdom, United States and China based on EEA IORPs’ investment exposures.
Source: Refinitiv and Office for National Statistics (ONS) UK

Note: Weighted average for EUR, GBP, CHF and USD based on EEA IORPs’ investment exposures.
Source: Refinitiv

Note: Average of forecasts four quarters ahead, weighted average for Euro area, United Kingdom, Switzerland, United States and BRICS based on EEA IORPs’ investment exposures.
Source: Bloomberg Finance L.P.

Credit risks

Credit risks remain at medium level. Credit default swaps (CDS) spreads for government bonds increased (9.4 to 10.4 bps), while for corporate bonds slightly dropped (58.9 to 57.1 bps) at end-June compared to end-March 2025. The median exposure of IORPs towards sovereigns (excluding exposures via collective investment undertakings) as a share of total assets stayed steady at 14.6%, while for corporate bonds slightly decreased to 2.1% in the first quarter of 2025 (2.3% in the previous quarter). When considering investments via collective investment undertakings (annual data available for 2024), the median exposure of IORPs towards sovereigns increased to 24.8% (23.2% in the previous year), while for corporate bonds remained stable at 15.8%. IORPs’ investments in loans and mortgages are limited, with the household debt-to-income ratio for the euro area decreasing by around 0.5 p.p. to 83.1% based on the latest available data (Q4-2024). The correlation between the debt-service ratio of non-financial corporations and non-financial corporate bond spreads, aimed at capturing potential credit risk mispricing, became more negative in the fourth quarter of 2024. In terms of credit quality, the median average CQS of IORPs’ investments was 1.6 in the first quarter of 2025, corresponding to an S&P rating between AA and A. The median exposure of IORPs to below investment grade assets (with a CQS higher than 3) is low (0% of total assets), though when considering the weighted average for the sector the figure increases (5.9%), indicating higher exposures for larger IORPs.



Note: The indicator includes exposures via collective investment undertakings, i.e. look-through is applied.
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: The indicator includes exposures via collective investment undertakings, i.e. look-through is applied.
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Left scale shows the distribution of exposures excl. collective investment undertakings (inter-quartile range and median), right scale the risk measure for Euro Area. This indicator is only relevant for some jurisdictions
Source: EIOPA Occupational Pensions Regulatory Reporting and ECB

Source: EIOPA Occupational Pensions Regulatory Reporting

Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Weighted average of the debt-service ratio of non-financial corporations (NFCs) for Germany, Spain, France, Italy, Netherlands, United Kingdom and United States based on EEA IORPs’ investment exposures. Correlation between the debt-service ratio of NFCs and the credit spread of NFCs bonds based on a 12-quarter rolling window
Source: BIS database for debt service ratios for the private non-financial sector and Bloomberg, LECFOAS Index

Market & asset return risks

Market and asset return risks remain high with elevated volatility in the equity market at end-June. The volatility in the bond market decreased compared to the previous assessment. In terms of investments, the median exposure to bonds as a share of total assets (including exposures to collective investment undertakings (CIUs) investing in bonds) is largely unchanged at 55.2% in the first quarter of 2025, while for equity decreased to 24.9% (25.9% in the previous quarter). Real estate prices increased across the Euro Area by 0.5% in the last quarter of 2024 (-5.1% in the previous quarter) after two years of decline. This development was particularly driven by residential real estate prices, while commercial real estate prices remained still subdued. The median exposure of IORPs towards property as a share of total assets is limited (below 1% in the first quarter of 2025), though the figure is higher when considering the weighted average for the sector (6.0%). This indicates higher exposures for larger IORPs. Also, exposures to assets denominated in foreign currency seem to be higher for larger IORPs, with the median exposure at 0.5% of total assets and the weighted average at 26.5% in the first quarter of 2025. The median duration of IORPs’ assets is overall stable standing slightly above 5 years (weighted average for the sector around 7 years). In terms of asset return risks, IORPs’ portfolio performance, measured as investment income including unrealised gains and losses as a share of total assets, was positive reaching 6.6% in 2024 (8.0% in 2023). Costs, calculated as the sum of administrative, investment and other expenses over total assets remained broadly stable in 2024 (median at 0.5%).



Note: Left scale shows the distribution of exposures incl. collective investment undertakings investing in equity (inter-quartile range and median), right scale the risk measure
Source: EIOPA Occupational Pensions Regulatory Reporting and Bloomberg

Note: Left scale shows the distribution of exposures incl. collective investment undertakings investing in bonds (inter-quartile range and median), right scale the risk measure
Source: EIOPA Occupational Pensions Regulatory Reporting and Bloomberg

Note: Left scale shows the distribution of exposures incl. collective investment undertakings investing in real estate (inter-quartile range and median), right scale the risk measure. The growth of real estate prices is calculated as a weighted average of commercial and residential real estate prices based on EEA IORPs’ investment exposures
Source: EIOPA Occupational Pensions Regulatory Reporting and ECB

Source: EIOPA Occupational Pensions Regulatory Reporting

Source: EIOPA Occupational Pensions Regulatory Reporting

Note: The indicator is calculated based on the residual modified duration of assets
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: The indicator is calculated based on reported investment income including unrealised gains and losses
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Tax expenses are excluded
Source: EIOPA Occupational Pensions Regulatory Reporting

Liquidity risks

Liquidity risks are at medium level with an increasing trend driven by the developments in the IORPs’ derivative positions. The weighted average of the net market value of IORPs’ derivatives grew more negative (-3.1% in Q1-2025 from -2.1% of total assets in Q4-2024) due to the slightly higher interest rates in Q1-2025 compared to Q4-2024. Similarly, the median of the same indicator shifted downwards to -1.1% (-0.09% in the previous quarter). This indicator and cash holdings tend to mirror each other and therefore, grossly, balance out, in particular for the largest IORPs. The median value of the liquid assets ratio remained largely unchanged at 52.2% in the first quarter of 2025. The median value for the (annual) liquidity indicator measuring inflows (contributions) as a share of outflows (mainly benefit payments) remained overall stable at 108.1% in 2024. The weighted average for this indicator stayed at 120.1%, still pointing to a more comfortable cash flow position for large IORPs. The indicator on the sustainability of the cash flow position (annual), which compares net premium contributions and benefit payments to liquid assets, is positive for most of the distribution and also considering the weighted average for the sector.



Note: The indicator is based on a weighting and bucketing of asset classes according to their liquidity
Source: EIOPA Occupational Pensions Regulatory Reporting

Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Net market value of derivatives as a share of total assets
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: The existence of negative cash holdings can result from collateral positions that are reported as negative assets
Source: EIOPA Occupational Pensions Regulatory Reporting

Source: EIOPA Occupational Pensions Regulatory Reporting

Reserve & funding risks

Reserve & funding risks for defined benefit (DB) schemes are at medium level with an improvement in the financial positions in the first quarter of 2025 due to the slightly higher interest rates in the same quarter. Given the longer duration of IORPs’ technical provisions, higher rates lowered the value of their liabilities to a larger extent than their assets. The median excess of assets over liabilities increased to 19.9% in the first quarter of 2025 (17.9% in the previous quarter). Similarly, the median funding ratio, calculated as assets over technical provisions raised to 121.1% (119.7% in the previous quarter).



Note: The indicator is calculated as excess of assets over liabilities as a share of liabilities
Source: EIOPA Occupational Pensions Regulatory Reporting

Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Indicator is calculated based on the annual latest available expectancy at birth for all EEA countries
Source: Eurostat

Note: Indicator is calculated based on the annual latest available remaining life expectancy for a 65 years old person for all EEA countries
Source: Eurostat

Concentration risks

Concentration risks are at medium level. IORPs’ median (direct) exposure to banks remained limited below 1% in the first quarter of 2025. Similarly, exposures to other financial institutions (other than banking) stayed below 1%. IORPs’ exposures to domestic sovereign debt slightly increased to 1.7% of total assets in the first quarter of 2025 (1.2% in the previous quarter), while the weighted average remained largely unchanged at 4.8%, pointing to higher exposures for larger IORPs. The portfolio concentration per asset class, sector and country, measured by the Herfindahl Hirschman index, remained broadly unchanged compared to the previous quarter. These measures are calculated excluding investments via collective investment undertakings (CIUs), therefore showing high levels of concentration for those IORPs investing mainly via this asset class.



Note: Banks comprise all activities identified with NACE code K64.1.9. The numerator excludes collective investment undertakings
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Other financial institutions comprise all activities identified with NACE codes K64 (excl. K64.1.9.), K65 and K66. The numerator excludes collective investment undertakings. As of April 2025, figures have been revised following a methodological review.
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: The numerator excludes collective investment undertakings
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Herfindahl Hirschman index computed on six balance sheet asset classes (government bonds, corporate bonds, equities, property, cash and cash equivalents and loans and mortgages). Collective investment undertakings (CIUs) are excluded. The indicator includes small IORPs investing mainly via CIUs and thus with a high level of concentration
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Herfindahl Hirschman index computed on issuer sector excluding collective investment undertakings (CIUs), cash and deposits and property. The indicator includes small IORPs investing mainly via CIUs and thus with a high level of concentration
Source: EIOPA Occupational Pensions Regulatory Reporting

Note: Herfindahl Hirschman index computed on issuer country excluding collective investment undertakings (CIUs), cash and deposits, mortgages and loans and property. The indicator includes small IORPs investing mainly via CIUs and thus with a high level of concentration
Source: EIOPA Occupational Pensions Regulatory Reporting

Digitalisation & cyber risks

Digitalisation and cyber risks are at medium level. The materiality of these risks for IORPs as assessed by supervisors remained high in the second quarter of 2025, while below the levels reached in the last year, amid continued concerns related to geopolitical tensions and related uncertainty.



Note: Scores compiled based on the assessment of probability and impact (lhs: scale from 1 to 4) of digitalisation & cyber risks from National Competent Authorities. The average for each answer across countries is then normalised (rhs: scale from 0 to 100)
Source: EIOPA’s Pension Bottom-up Survey

APPENDIX





Arrows for the Trend show changes for the 3 months preceding the reference date, while arrows for the Outlook show expected developments for the next 12 months.

Description of risk categories

Macro risks

This category depicts developments in the macro-economic environment that could impact the IORP sector. This category is based on publicly available data on macro variables that may be used for broader macroprudential monitoring and analysis.

Credit risks

The category assesses the vulnerability of the IORP sector towards credit risks. To achieve this aim, credit-relevant asset class exposures of the IORPs are combined with the relevant risk metrics applicable to these asset classes.

Market & asset return risks

The risk category depicts the main risks IORPs are exposed to on financial markets and the level of asset returns and costs (e.g. administrative, investments and other). For most asset classes these risks are being assessed by analysing both the investment exposure of the IORP sector and an underlying risk metric. The exposures give a picture of the vulnerability of the sector to adverse developments; the risk metric, usually the volatility of the yields of the associated indices, gives a picture of the current level of riskiness.

Liquidity risks

Liquidity risk can be defined as the risk that an institution will not be able to meet its payment obligations timely or without generating excessive cost.

Reserve & funding risks

This category aims to assess the level of the own funds of IORPs and the robustness of its technical provisions. This risk category is only relevant for IORPs executing defined benefit pension schemes (DB).

Concentration risks

This section assesses different concentration risks IORPs are exposed to via their portfolio investments. It depicts various concentration types.

Digitalisation & cyber risks

The category aims at monitoring potential financial stability risks related to an increased digitalisation, which exposes the IORP sector to risks from a digital operational resilience perspective (i.e. cyber security risks).


  1. Due to limited data availability, only environmental risks are currently considered in the category. As more data will be available, social and governance risks should be also considered.↩︎

 

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