Portugal's Insurance and Pension Funds Supervisory Authority (ASF) released its December 2025 risk dashboard for the pension funds sector, keeping macroeconomic and market risks rated medium-high while revising the credit risk assessment down from medium-high to medium-low. Liquidity risk remained medium-low, profitability and solvency risk for pension fund management companies (Sociedades Gestoras de Fundos de Pensões, SGFP) stayed low, interconnections risk remained medium-low, and the risks specific to defined benefit and defined contribution plans were maintained at low. Macroeconomic risks were held at medium-high despite inflation being close to monetary authorities’ target, reflecting continuing uncertainties linked to geopolitical tensions and debt dynamics during monetary policy normalisation. The lower credit risk rating was supported by a broad fall in sovereign risk premia between April and December 2025 and generally stable financial and non-financial issuer premia, with ASF noting that initiatives to strengthen European strategic autonomy and military capacity could still pressure risk premia in more highly indebted countries. Market risk stayed medium-high with a downward trend as volatility eased after the March–April 2025 spike, although equity volatility rose again from early October to early December, and domestic real estate returns accelerated to 17.7% in September 2025. The asset liquidity ratio fell 1.2 percentage points quarter-on-quarter to 62.1%, while SGFP average return on equity was 8.1% in the first half of 2025 and the sector solvency position improved to 209% at end-H1 2025 from 195.7% at end-2024; interconnections showed slightly lower investment in bank-issued securities alongside a slight rise in concentration by sector and economic group. The dashboard reflects pension fund sector data as at 30 September 2025 and financial variables as at 25 November 2025.

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