The funding ratios of pension funds at DAX-listed companies jumped by more than 10 percentage points year-on-year in 2025, reaching a new record high of 93%, according to the latest figures from Mercer.
Pension assets at DAX firms rose by €12bn, from €261bn to around €273bn year-on-year, despite a volatile year in financial markets.
While bond prices declined, stronger performance in other asset classes lifted overall pension assets at Germany’s largest companies, Mercer said.
At the same time, developments in bond markets drove a sharp increase in discount rates, cutting pension liabilities by around €27bn, from €317bn in 2024 to approximately €291bn last year.
“We assume that DAX companies increased their discount rate by an average of approximately 0.8 percentage points in 2025. This has led to a significant decrease in pension liabilities,” said chief actuary at Mercer Germany Thomas Hagemann.
André Geilenkothen, head of pension funding consulting at Mercer Germany, said higher interest rates and record funding levels are opening up further de-risking options for companies.
In particular, funding liabilities through Pensionsfonds – one of the vehicles used to manage occupational pensions in Germany – and the use of pension corporations (Rentnergesellschaften) in buyout transactions can further reduce operational and balance sheet risks, he said.
Companies are also in a position to reduce cash outflows and the costs of statutory insolvency protection by using Pensionsfonds, Geilenkothen added.
Looking ahead, capital markets will present both opportunities and risks for DAX pension funds when allocating assets this year, according to head of investment consulting Jeffrey Dissmann.
“The challenge for pension investors is to prepare for various scenarios and implement a robust governance concept. Now it is time to plan targeted risk reduction in pension balance sheets and to secure the high level of funding,” he said.
