The funding ratio of German DAX 40 company pension schemes rose to a record 90.8 per cent at the end of H1 2026, up from 87 per cent at the end of 2025, the highest level since records began, according to analysis by WTW Germany.

The firm reported that MDAX companies also saw a significant improvement in their funding level from 69.6 per cent at the end of 2025 to 73.2 per cent at the end of the first half of 2026.

WTW said this improvement in funding levels was driven by a rise in the international discount rate of 10 basis points to 4.2 per cent, as well as an overall positive trend in the capital markets.

The analysis also reported that capital markets were resilient despite geopolitical pressures.

The first half of 2026 saw escalating tensions in the Middle East and rising energy prices, which reignited inflation fears and prompted the European Central Bank to raise its key interest rate by 25 basis points in June – the first increase since September 2023.

However, the firm explained that the anticipated interest rate cuts by the Federal Reserve are now also considered unlikely.

The pension fund assets of DAX companies rose by 3.5 per cent to €264.9bn in the first half of the year, while its pension liabilities fell by around 1 per cent since the start of the year to €291.6bn.

Meanwhile, MDAX scheme assets increased by 4.7 per cent to €47.1bn in the first half of the year, and its liabilities decreased to €64.4bn.

Commenting on the results, WTW head of retirement Germany, Hanne Borst, said: “Despite the high volatility on the capital markets at times, German pension schemes performed remarkably robustly in the first half of 2026.

"Buoyed by the capital markets and the continued high level of interest rates, the funding ratios of many pension schemes once again reached very high levels at the half-year mark.”

WTW said that breaking through the 90 per cent funding ratio mark represents a transition into a new strategic phase of pension management for many companies.

When the funding ratio was below this level, companies focused on securing pension liabilities and limiting risks.

Now, however, the firm suggested that the focus has shifted to securing the level achieved in the long term and utilising it strategically, bringing pension buyouts and other de-risking measures within reach.

In addition, it highlighted that liability-driven and/or cash-flow-driven investment strategies are gaining importance, as they are designed to maintain a high funding ratio over the long term.

WTW head of general consulting retirement, Johannes Heiniz, commented that a funding ratio of over 90 per cent “changes the rules of the game” in pension management.

“Many companies now have the opportunity to systematically reduce their pension risks and strategically safeguard the funding status they have achieved. This is an opportunity that must be actively seized,” he added.

The DAX is a stock market index that tracks the performance of the 40 largest companies listed on the Frankfurt Stock Exchange, while the MDAX tracks the performance of the 50 largest companies ranked below those included in the DAX.

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