The funding ratios of pension funds of DAX-listed companies have exceeded 90% for the first time, marking a turning point in pension risk management at Germany’s largest firms, according to consultancy WTW.
In the first half of this year, the funding ratios of DAX schemes rose to 90.8%, the highest level ever recorded, from 87% at the end of 2025, according to WTW’s German Pension Finance Watch.
Assets set aside to meet pension promises increased by 3.5% to €264.9bn in the first half of the year, while liabilities fell by around 1% to €291.6bn.
Key drivers of the further improvement in funding were a 10-basis-point increase in the international discount rate to 4.20%, which reduced the present value of future benefits and pension provisions on balance sheets, and positive capital market performance.
Capital markets proved resilient overall despite the war in Iran and rising energy prices, which stoked inflation concerns and prompted the European Central Bank to raise its key interest rate in June, the first hike since September 2023.
Turning point
According to WTW, a funding ratio of more than 90% represents a transition for many companies to a new strategic phase of pension management.
With funding levels below 90%, the main focus of German corporates was to secure pension obligations and limit risks.
Now, the main question is how to permanently secure and strategically leverage solid pension funding.
In practice, according to WTW, this development brings pension buyouts and other de-risking measures “within reach”.
At the same time, liability-driven and cash-flow-driven investment strategies are gaining traction to stabilise the high level of funding, the consultancy added.
“A funding level of over 90% changes the rules of the game in pension management. Many companies now have the opportunity to systematically reduce their pension risks and strategically secure the funding status they have achieved,” said head of general consulting retirement at WTW Johannes Heiniz.
“This is an opportunity that should be actively seized,” he added.
According to Aon, around one in four DAX companies has already fully backed its pension obligations with plan assets, underscoring the high stability and funding strength of company pension schemes in Germany, the consultancy said in its analysis of the financial statements of DAX companies published earlier this month.
“If interest rates stabilise at a high level, or even rise further by the end of the year, we will see more DAX companies with fully funded pension obligations,” said Christoph Tellmann, senior consultant at Aon Wealth Solutions Germany.
