The European market for institutions for occupational retirement provision (IORPs) has seen continued consolidation in recent years, and a “noticeable” recovery in terms of assets under management, research from the European Insurance and Occupational Pensions Authority (EIOPA) has revealed.

The EIOPA's 2024 IORPs in Focus report revealed that the number of IORPs fell by 1.7 per cent at the end of 2023, as smaller institutions continued to merge into larger IORPs.

However, the number of multi-employer IORPs grew, indicating further consolidation and potentially greater efficiency as companies seek economies of scale.

At the end of 2023, exactly 50 percent of cross-border IORPs were servicing multiple, unrelated employers, representing a slight increase from the figures reported at the end of 2022.

However, cross-border activity has continued to fall, as EIOPA found that 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.

Despite the consolidation seen in the market, the report found that assets under management rebounded to €2.72trn at the end of 2023, up from €2.3trn in 2022.

In terms of assets under management, the largest IORPs are located in the Netherlands, Sweden, Germany and France.

In particular, Dutch IORPs stand out with almost €1.6trn in assets under management, which accounts for more than half of the entire market.

The research also revealed steady growth in members and beneficiaries, as the total number of members and beneficiaries reached 71.6 million at the end of 2023.

It also highlighted a continued shift towards defined contribution schemes, With 31 per cent of active members in DC schemes in 2013, rising to 59 per cent in 2023, although defined benefit schemes still account for a substantial proportion of assets.

In terms of investment strategies, IORPs continued to rely on investment funds (38.4 per cent), especially on those invested in equities and debt.

"Notably", significant differences were seen in the investment approaches exist across member states, which EIOPA highlighted as evidence of the relevance of local factors in shaping investment decisions.

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