The European Insurance and Occupational Pensions Authority (EIOPA) published today its 2024 ‘IORPs in Focus’ report, which provides insights into the latest developments in Europe’s occupational pension fund market. The report’s data reveals ongoing consolidation, a continued shift towards defined contribution plans and a noticeable recovery in terms of assets under management. It is the first report since 2018 that analyses both domestic and cross-border IORPs in a single publication.
EIOPA’s 2024 report on developments in the European market for institutions for occupational retirement provision (IORPs) shows steady growth in members and beneficiaries, as well as a rebound in assets under management (AuM) even as the number of IORPs continues to edge down.
The total number of members and beneficiaries reached 71.6 million at the end of 2023 while assets under management rebounded to €2.72 trillion, up from €2.3 trillion in 2022. The report notes a persistent shift towards defined contribution schemes, although defined benefit schemes still account for a substantial proportion of assets.
The number of IORPs decreased by 1.7% as smaller institutions continue to merge into larger IORPs. Meanwhile, the number of multi-employer IORPs grew, indicating further consolidation and potentially greater efficiency as companies seek economies of scale.
In terms of investment strategies, IORPs continue to rely on investment funds, especially on those invested in equities and debt. Notably, significant differences in the investment approaches exist across member states, highlighting the relevance of local factors in shaping investment decisions.
Looking at cross-border activities, despite the IORP II Directive’s aim to deepen market integration, cross-border IORPs operate in only eight Member States, with the total number declining to 28, following years of stagnation.