The funding level of German DAX-listed company defined benefit (DB) pension schemes reached a record high funding level of 87 per cent in 2025, according to WTW.

WTW’s DAX Pension Schemes 2025 study found that the increase is five percentage points higher than at the end of 2024. The study is based on 30 annual reports from 40 DAX companies, covering 94 per cent of total pension obligations and plan assets.

Despite the high funding level, total pension assets of DAX companies fell to €258bn at the end of 2025, due to higher benefit payments than contributions. However, pension fund liabilities also fell to €298bn.

The discount rate increased by a median of 67 basis points to 4.10 per cent.
“Rising interest rates and solid capital markets have once again significantly eased the burden on corporate pension schemes. Many companies are now in their strongest position for years,” WTW head of retirement Germany, Hanne Borst, said.

However, WTW stated that many pension schemes are reassessing their investment strategies in response to geopolitical tensions and market volatility. For example, greater diversification, flexible governance models and targeted hedging strategies are key priorities.

Investments in private markets are also gaining importance, helping to diversify returns and stabilise performance.

WTW added that the current attractive yield environment supports asset classes such as private credit, infrastructure and high-quality fixed income as stable sources of returns.

In terms of strategies, liability-driven investment (LDI) remains central to German pension funds. In parallel, cashflow-driven investment strategies are becoming more important, with assets such as corporate bonds, infrastructure debt and real estate providing stable income streams to fund pension payments.

According to WTW head of general consulting retirement, Dr Johannes Heiniz, the high funding level of pension funds “changes the rules of the game” in pension management.

“Many companies now have very good conditions to systematically reduce their pension risks,” he explained.

Indeed, Borst pointed to increased de-risking options for pension funds, such as buyouts, which the study noted are increasingly being discussed.
In addition, WTW highlighted how financial education is becoming a growing focus for pension schemes, as employees seek more guidance with their retirement planning.

As a result, companies are providing new information tools, such as digital pension portals, as well as simulation tools and advisory services to help employees better understand their retirement benefits and make informed decisions.

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