The European Insurance and Occupational Pensions Authority (EIOPA) has warned that market risks remain elevated for European occupational pension funds amid persistent geopolitical tensions, despite an improvement in defined benefit (DB) schemes’ financial positions.
In its October risk dashboard, published on 29 October, EIOPA highlighted increased bond market volatility and widening sovereign and corporate bond spreads by the end of September, bringing debt financing costs and private credit quality into sharper focus.
Persistently high market valuations leave markets vulnerable to a broader correction and a repricing of risk premia if geopolitical tensions intensify, the regulator said.
EIOPA also flagged a worsening outlook for digitalisation and cyber risks. Supervisors continue to assess these risks as elevated for institutions for occupational retirement provision (IORPs), particularly given cyber threats associated with frontier artificial intelligence models and the potential use of cyberattacks in international conflicts.
However, the European occupational pensions sector remains resilient, supported by an improvement in DB schemes’ financial positions in the second quarter of 2026, which lowered reserve and funding risks.
EIOPA’s assessment draws on Q2 2026 and annual 2025 regulatory reporting from 625 occupational pension institutions across the European Economic Area, supplemented by market data up to the end of September 2026.
