PRESS RELEASE
Pension funds show resilience in 2025 EIOPA liquidity stress test
Brussels, 18 December 2025
Yesterday, EIOPA published the results of its liquidity stress test of European Institutions for Occupational Retirement Provisions (IORPs) in which 156 IORPs from 18 countries participated, representing approximately 60% of IORPs’ assets in the European Economic Area (EEA).
The results highlight the resilience of EEA IORPs in managing liquidity risks, even under severe stress conditions. While the scenarios simulated significant geopolitical tensions and economic disruptions, the available liquidity, together with the application of management actions, proved effective in mitigating (substantial) drops in liquidity.
This stress test is an asset-only exercise that focuses on liquidity risks and utilizes two scenarios. One is a “yield curve up” (YCU) scenario with interest rates increasing rapidly because market participants are anticipating adverse economic developments in a context of the escalation of geopolitical tensions. The second one is a “yield curve down” (YCD) scenario with interest rates decreasing sharply because market participants are internalising an unexpected prolongation of geopolitical tensions.
Matti Leppälä, CEO/Secretary General, PensionsEurope:
‘’The results of the 2025 EIOPA Stress Test demonstrate the robustness of EEA IORPs in navigating uncertain geopolitical environments. While the two scenarios tested the liquidity position of IORPs in stressed situations, the ability of IORPs to implement effective management actions underscores their commitment to safeguarding the longterm interests of pension beneficiaries. The availability of a sufficient cash reserve and adequate management actions is also crucial in ensuring that IORPs can withstand the simulated shocks simulating adverse economic developments.’’
Simone Miotto, Executive Director, AEIP, said:
“The European Association of Paritarian Institutions (AEIP) thanks EIOPA for its efforts in conducting its 2025 stress test for IORPs, as well as for the constructive engagement throughout the preparatory phase and the execution of this exercise. We are pleased to note that this year’s stress test reaffirms that IORPs in the EEA hold a sufficient level of liquid assets, enabling them to withstand severe market shock scenarios. The stress test shows that the current risk management framework for IORPs is fit for purpose as EEA IORPs do not have any liquidity weaknesses, and have a wide range of resources, tools, and expertise to address any adverse market conditions, while continuing to deliver adequate retirement income to their members and beneficiaries.”
At the end of December 2024, under the yield curve up scenario, the liquidity position of IORPs (aggregated data for both DB and DC schemes) has been reduced from a baseline of €74 billion to -€60 billion under stress, but improved to €15 billion following management actions.
At the end of December 2024, under the yield curve down scenario, the liquidity position of IORPs (aggregated data for both DB and DC schemes) stayed positive, moving from €74 billion at baseline to €56 billion under stress, and further improving to €70 billion after management actions.
Miotto, Executive Director, AEIP, continues:
“We appreciate the EIOPA’s decision not to apply a holistic balance sheet approach in the 2025 IORPs’ stress tests. This is positive as it helps reduce the reporting burden for the pension funds participating in the stress test. Additionally, an asset-only methodology is more appropriate for a comprehensive and comparable analysis of all IORPs, irrespective of whether they offer DB or DC pension schemes. Given the increasing shift towards DC pensions, AEIP encourages EIOPA to continue using this approach in future stress test exercises for IORPs.”
Leppälä, CEO/Secretary General, PensionsEurope continues:
‘‘The stress test also highlights the importance of diversified asset allocation strategies, particularly in the face of geopolitical uncertainties and market volatility. The stress test results reaffirm that IORPs are well-positioned to support adverse developments in uncertain environments.’’
PensionsEurope and AEIP remain committed to continued cooperation and engagement with EIOPA with the aim of further improving future stress tests for IORPs. The next EIOPA IORP stress test will take place in 2028.
Read more about our work on stress testing issues here.
Read our press release in pdf format here.
