European Insurance and Occupational Pensions Authority finds European IORP risks stable at medium levels while market and asset return risks stay high

The European Insurance and Occupational Pensions Authority (EIOPA) published its July 2025 Risk Dashboard for Institutions for Occupational Retirement Provision (IORPs), based on Q1 2025 pension reporting data and Q2 2025 market data. It concludes that overall risks in the European IORP sector remain stable and at medium levels, but vulnerabilities persist due to elevated market volatility and an uncertain geopolitical environment, with market and asset return risks assessed as high and the outlook worsening. Macroeconomic risks remain at a medium level despite a temporary reduction in trade and tariff-related risks, reflecting high uncertainty and signs of weaker growth in major regions in Q2 2025. Elevated end-June 2025 financial market volatility drove the higher market risk assessment, while euro area real estate prices rose in the latest quarter after two years of decline and IORP portfolio performance was positive in 2024. Liquidity risks are trending up, linked to current market conditions and negative developments in derivative positions, although stock-based indicators pointed to comfortable liquidity at the start of 2025. Reserve and funding risks remained contained, with defined benefit IORPs described as robust in Q1 2025, and digitalisation and cyber risks stayed at a medium level with heightened relevance amid geopolitical tensions. The dashboard summarises risks across defined contribution and defined benefit schemes in the European Economic Area using indicators drawn from regulatory reporting for 625 IORPs, complemented with market data with an end-June 2025 cut-off.