EIOPA Data Show Stronger Defined Benefit Positions Lowering Reserve and Funding Risk

EIOPA Data Show Stronger Defined Benefit Positions Lowering Reserve and Funding Risk

EIOPA’s IORP Risk Dashboard underlines elevated market risk for occupational pension funds, with reserve and funding risks for DB schemes at a low level.

EIOPA’s news release on the dashboard says that Europe’s IORP sector remains resilient, supported by the strengthening of the financial position for Defined Benefit (DB) schemes in Q2-2026, resulting in a lower level of reserve and funding risks. EIOPA adds that the data is based on quarterly Q2 2026 and annual 2025 regulatory reporting collected from 625 IORPs.

Geopolitics and Bond Spreads Set the Macro and Credit Backdrop

On macroeconomic risks, EIOPA’s release states: “Persistent geopolitical tensions remain the key source of macroeconomic risks, clouding the outlook for global economic growth, fuelling inflation, and putting pressure on sovereign debt sustainability.” In the dashboard’s own entry, the macro category reads: “Macroeconomic risks are at a medium level, with an increasing risk outlook.”

On credit, EIOPA’s release notes that sovereign and corporate bond spreads have widened by the end of September, bringing debt financing costs and private credit quality more into focus for both analysts and supervisors. The dashboard states that credit risks remain at a medium level, with credit default swaps (CDS) spreads for government and corporate bonds widening at end-September (compared to end-June).

On below-investment-grade holdings, the dashboard reports: “The median exposure of IORPs to below investment grade assets (with a CQS higher than 3) is low (0% of total assets) in the second quarter of 2026, though when considering the weighted average for the sector, the figure rises to (5.8%), indicating higher exposures for larger IORPs.”

Market and Asset Return Risks, in Two Documents

EIOPA’s release states: “Market and asset return risks remain elevated, with noticeable increases in bond market volatility.” The dashboard words it differently: “Market and asset return risks remain at a high level, with bond market volatility increasing, while equity market volatility was contained at end-September 2026 (compared to end-July 2026).”

For the outlook, the dashboard says that the risk outlook for the next 12 months remains shaped by a potential broader market correction, elevated valuations and a possible reassessment of risk premia due to renewed geopolitical tensions. InsuraBeat has separate coverage of EIOPA’s insurance risk dashboard coverage.

Reserve and Funding Risks for Defined Benefit Schemes Move Down

The dashboard states that Reserve & funding risks for defined benefit (DB) schemes are at a low level, decreasing from medium, driven by the strengthening of financial position of DB IORPs in the second quarter of 2026.

On the funding ratio, the dashboard reports that the median funding ratio, calculated as assets over technical provisions increased to 130.2% in the second quarter of 2026 (125.3% in the previous quarter). InsuraBeat has separate coverage of EIOPA’s earlier IORP dashboard.

Cyber Risk and the Supervisory Message on DORA

On cyber, EIOPA’s release states: “Supervisors continue to assess the materiality of these risks for IORPs as elevated, particularly in light of growing cyber threats associated with frontier AI models and the potential use of cyberattacks in international conflicts.” In the dashboard, digitalisation and cyber risks are at a medium level, with an increasing outlook.

On the outlook, the dashboard says that the persistent geopolitical uncertainty and growing systemic cyber risks associated with frontier AI models are expected to continue shaping the risk outlook. It then records that supervisors stressed the need for financial entities to strengthen their cybersecurity capabilities in response to these risks, also in line with DORA requirements.

Liquidity, Concentration and ESG Entries

The dashboard states that liquidity risks remain at a medium level, showing signs of stability. It reports that the median value of the liquid assets ratio remained largely unchanged at around 51.2% in the second quarter of 2026.

For concentration, the dashboard states that risks are at a medium level with a stable trend. It adds that ESG related risks remain stable at a medium level. On data scope, it states: “The reference date for IORP data is Q2-2026 for quarterly indicators and 2025-YE for annual indicators.”

Frequently Asked Questions

What is the market and asset return risk level in the dashboard?
The dashboard states: “Market and asset return risks remain at a high level, with bond market volatility increasing, while equity market volatility was contained at end-September 2026 (compared to end-July 2026).”
How many IORPs supplied the data behind the dashboard?
EIOPA says the data is based on quarterly Q2 2026 and annual 2025 regulatory reporting collected from 625 IORPs.
What reference dates does the dashboard use for IORP data?
The dashboard states: “The reference date for IORP data is Q2-2026 for quarterly indicators and 2025-YE for annual indicators.”
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Patrice Dumont

InsuraBeat correspondent

Senior reporter at InsuraBeat leading coverage of insurance regulation, executive moves, and the insurtech landscape across EMEA and APAC. Fifteen years straddling regulation and trade journalism: began in the legal team of a French insurance industry body, advising members on Solvency II implementation and product approvals, then moved to specialised insurance media to cover EIOPA, NAIC and IAIS work and prudential reform. Graduate of the Pan-Asian School of Governance and Regulatory Affairs (Singapore), with an LL.M. in Insurance Prudential Law and Cross-Border Compliance from the Nihon-Siam Institute of Legal Studies (Bangkok). Writes from Brussels, on European afternoon markets.

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