The European Authority for Pensions and Insurance warns about market risks for occupational pension funds.
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EIOPA, the EU authority that supervises risks in insurance and occupational pensions, states that market volatility, geopolitical tensions, and inflation weigh on occupational pension funds in the European Economic Area.
The European Insurance and Occupational Pensions Authority, EIOPA, warns that market risks for European occupational pension funds have risen to a high level amid persistent geopolitical tensions, financial volatility, and inflation and energy pressures.
In short
EIOPA has published the risk dashboard for April 2026 for occupational pension institutions, IORPs, in the European Economic Area.
Market and yield risks have risen to a high level, following an increase in volatility in the stock and bond markets at the end of March 2026.
Macroeconomic, credit, liquidity, concentration, ESG, and cyber risks are assessed at a medium level.
Reserve and funding risks for defined benefit schemes remain low, amid a stronger financial position.
The data is based on reports up to the fourth quarter of 2025 and market data up to the end of March 2026.
The European Insurance and Occupational Pensions Authority has published the risk dashboard for April 2026 for institutions providing occupational pensions, IORPs, warning that geopolitical tensions and uncertainty continue to shape the risk landscape of the European sector.
EIOPA indicates market risks as the main concern. Market and yield risks have risen to a high level, after volatility in the stock and bond markets increased at the end of March 2026, compared to the end of December 2025.
According to EIOPA, financial markets are tested by geopolitical uncertainty. Bond spreads have widened, and volatility in the stock and corporate bond markets has increased at the end of March. High asset valuations and doubts about artificial intelligence's ability to meet investor expectations increase market sensitivity to adverse geopolitical developments.
The risk dashboard mentions uncertainty regarding the trajectory and duration of the war in Iran, as well as ongoing conflicts in other regions. EIOPA notes that high geopolitical tensions continue to influence the risk outlook for the next 12 months.
Macroeconomic risks remain at a medium level, with an upward trend in projected inflation and 10-year swap rates. Inflation projections for major geographic regions have been revised upwards to 2.5% in the first quarter of 2026, compared to 2.1% in the previous quarter.
The weighted average of 10-year swap rates for major currencies continued the upward trend of recent years, reaching 3.3%, compared to 3.2% in the fourth quarter of 2025. Unemployment rates and projections for GDP growth for the next four quarters remained around 5.3% and 1.6% in the first quarter of 2026, respectively.
Credit risks remain at a medium level. EIOPA shows that CDS spreads for government and corporate bonds widened at the end of March 2026, reflecting high geopolitical instability. An anticipated increase in public spending for defense and infrastructure could put additional pressure on spreads.
The median exposure of IORPs to sovereign debt, excluding exposures through collective investment schemes, remained around 14% of total assets in the fourth quarter of 2025. The median exposure to corporate bonds was approximately 1.7%.
The credit quality of portfolios remains generally high. EIOPA shows that the median credit quality level for IORP investments increased to 1.7 in the fourth quarter of 2025, corresponding to a rating between AA and A on the S&P scale. The median exposure to assets below investment grade is low, close to 0% of total assets, but the weighted average reaches 5.8%, indicating higher exposures for some large funds.
In the market area, the median exposure to bonds, including through collective investment schemes invested in bonds, slightly decreased to 53.3% of total assets in the fourth quarter of 2025, compared to 54.3% in the previous quarter. Exposure to equities remained relatively stable at 26.3%.
The median exposure of IORPs to real estate is limited, below 1% of total assets, but the weighted average for the sector is 6%. Real estate prices continued to rise in the euro area, with a 2.2% increase in the second quarter of 2025, after a 1.6% decrease in the previous quarter.
EIOPA also signals differences between funds regarding exposure to assets denominated in foreign currency. The median exposure was 1% of total assets in the fourth quarter of 2025, while the weighted average was 26.4%, indicating that larger funds have more significant currency exposures.
Liquidity risks are assessed at a medium level, with a growing trend. The median value of IORP's net market positions in derivatives became more negative, reaching minus 1.6% of total assets in the fourth quarter of 2025, compared to minus 0.6% in the previous quarter. The weighted average of the same indicator reached minus 4.9%, compared to minus 3.9%.
EIOPA specifies that the evolution is mainly determined by higher interest rates. The report shows that the derivatives indicator and cash holdings tend to offset each other, especially for the largest IORPs. The median rate of liquid assets remained largely unchanged at 51.3% in the fourth quarter of 2025.
Reserve and funding risks for defined benefit schemes remain low. The financial position of these IORPs strengthened in the fourth quarter of 2025, due to the combined effect of strong investment returns, supported by higher stock prices, and the increase in long-term interest rates, which reduced the value of pension liabilities.
The median excess of assets over liabilities continued to grow, reaching 27.2% in the fourth quarter of 2025, compared to 25.3% in the previous quarter. The median funding rate, calculated as the ratio between assets and technical provisions, increased to 128.4%, compared to 126.4%.
Concentration risks are assessed at a medium level. The median direct exposure of IORPs to banks remained below 1% in the fourth quarter of 2025, as did exposures to other financial institutions. Weighted averages of 5.6% for banks and 5.2% for other financial institutions indicate higher exposures for larger funds.
ESG-related risks remain stable at a medium level. The median share of IORP investments in green bonds from total corporate bonds remained at 9.6% in the fourth quarter of 2025, following the upward trend observed since 2022.
Investments assessed against the EU taxonomy, as eligible activities, increased to 15.9% of total equities and corporate bonds in the fourth quarter of 2025, compared to 13.6% in the previous quarter. The weighted average remained stable at 27.6%, indicating higher exposures for larger funds.
Digitalization and cyber risks are at a medium level, but EIOPA notes that their materiality has increased in the first quarter of 2026 in the assessments of national supervisors. This evolution reflects concerns related to geopolitical tensions and associated uncertainty.
However, EIOPA emphasizes that despite the difficult environment, the European occupational pension sector continues to demonstrate resilience. Resilience is particularly visible in defined benefit schemes, where the financial position has improved amid investment returns, higher stock prices, and higher long-term interest rates.
The IORP risk dashboard for April 2026 is based on the latest reporting data from occupational pension funds, referencing up to the fourth quarter of 2025. The data comes from regulatory reports collected from 625 IORPs in the European Economic Area and is supplemented with market data up to the end of March 2026.
Depending on the type of pension scheme, risks are not always borne directly by occupational pension institutions. EIOPA specifies that they may be borne by members, beneficiaries, or sponsors, depending on the characteristics of each scheme.
Institutions providing occupational pensions manage pension schemes for workers and employers. Their supervision is relevant for financial stability, for the protection of beneficiaries, and for the resilience of private and occupational pension systems in Europe.
The EIOPA risk dashboard monitors several categories of vulnerabilities, including macroeconomic, credit, market, liquidity, reserve and funding, concentration, ESG, and digitalization and cyber risks. For each category, EIOPA assesses the level of risk, the trend over the last three months, and the outlook for the next 12 months.
The data published in April 2026 shows a combination of external pressures and internal resilience. The geopolitical environment and financial markets increase risks for assets and yields, while the funding position of defined benefit schemes remains solid.
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