Assets held by European iorps rose to €2.89trn at the end of 2025, supported by strong equity market performance, according to the European Insurance and Occupational Pensions Authority's (EIOPA) latest Financial Stability Report.

The report showed that total iorp assets increased by €26bn over the year, rising from €2.864trn at the end of 2024 to €2.890trn at the end of 2025.

While the value of investment funds, government bonds and other assets declined during the period, equity holdings increased by almost 10 per cent, equivalent to €55bn, serving as the main driver of overall asset growth.

In addition, DB liabilities fell from €2.445tn at the end of 2024 to €2.319tn at the end of 2025.

As a result, the average funding ratio for defined benefit iorps increased from 120 per cent to 128 per cent. According to EIOPA, the improvement reflected the combined effect of higher asset values and lower liabilities.

The average funding ratio across member states was 123 per cent, however, Sweden was well above this average, with a funding ratio close to 200 per cent.

Furthermore, the report pointed to a continued shift towards defined contribution (DC) pension provision.

While DB liabilities declined during 2025, the value of pension entitlements held in DC arrangements increased by €241bn. EIOPA said the increase reflected both asset growth and changes in volumes, driven in part by ongoing pension reforms in the Netherlands.

The supervisor noted that the Netherlands is undertaking a transition to a DC framework covering around €1.6trn of pension assets.

It said several major phases of the transition had been completed by early 2026 without significant market disruption, although it cautioned that the process remains under close monitoring given potential market volatility and inflationary pressures.

In preparation for the transition, Dutch pension funds have increased their interest-rate hedging activity, with average hedge ratios rising from 58 per cent in early 2023 to more than 70 per cent by mid-2025.

The Netherlands continued to dominate the European occupational pensions sector, accounting for just under 60 per cent of all European Economic Area (EEA) iorp assets.

It also recorded the highest pension asset penetration rate, with assets equivalent to around 143 per cent of GDP. Sweden followed with a penetration rate of 52.8 per cent, while Italy and Norway recorded rates of 9.2 per cent and 8.5 per cent, respectively.

In terms of total assets, Sweden accounted for 10.8 per cent of the EEA iorp market, followed by Germany with 8.9 per cent and Italy with 7.2 per cent.

EIOPA's report also showed that asset allocation remained broadly stable across the sector.

Investment funds remained the largest asset class, representing 36.1 per cent of total portfolios, followed by government bonds at 21.7 per cent, equities at 21 per cent and corporate bonds at 8.6 per cent.

However, holdings in investment funds declined in absolute terms from €1.071trn to €1.045trn during the year, although they remained above the €1trn mark.

Furthermore, asset allocation continued to vary significantly between member states. For example, Austrian iorps invested around 95 per cent of their assets through investment funds, while investment funds accounted for 61 per cent of German iorp portfolios. Swedish iorps, meanwhile, allocated 42 per cent of assets to equities.

Looking through underlying holdings, bonds accounted for 44.7 per cent of DB iorp assets and 48.9 per cent of DC assets, while equity exposure was around 35 per cent for both scheme types.

The report also provided an overview of pension scheme membership across the EEA.
Based on 2024 annual data, iorps had almost 36.5 million active members. Of these, just over nine million belonged to DB schemes, while around 20 million were members of DC schemes.

The number of deferred members exceeded 26 million and was evenly split between DB and DC arrangements.

The Netherlands, Italy, France, Germany and Sweden accounted for close to 80 per cent of all active iorp members across the EEA.

EIOPA also noted significant differences in pension system design between member states. While most active members of Dutch iorps continued to participate in DB schemes during the transition period, almost all active members of Italian iorps were enrolled in DC arrangements.

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